Indonesia: Merchandise exports rise in June, trade balance records a surplus
Merchandise exports inched up 2.3% on an annual basis in June (May: -29.1% year-on-year) on greater non-energy exports, marking the first increase since February. While the reading could be indicative of easing lockdowns in many key export partners, the data likely also reflects distortions due to the timing of the Idul Fitri holiday.
Meanwhile, merchandise imports were down 6.4% in annual terms in June (May: -42.2% yoy) on a huge fall in energy imports amid weak oil prices. However, the easing of lockdown measures saw a rebound in consumer goods imports. As a result, the merchandise trade surplus narrowed to a USD 1.3 billion surplus in June (May: USD 2.0 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 3.8 billion surplus in June, compared to the USD 2.8 billion surplus in May.
Looking ahead, export and import performance should gradually improve as the world emerges from lockdown, although the outlook is highly uncertain. More positively, analysts at UOB highlight a potential upside risk to exports: “the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which took effect this month, will hopefully encourage more export activities going forward; as all the country’s export products will be untaxed in Australia and the industries in Indonesia will get raw materials with lower costs as the import tariff for Australian products will not be imposed.”