Indonesia: Trade surplus recorded in February, but exports continue to decline sharply

According to Statistics Indonesia, the country recorded a trade surplus of USD 0.3 billion in February, confounding market expectations of a deficit. February’s figure marked the first surplus since September last year and contrasted the USD 0.1 billion deficit recorded in the same month of 2018.

The surplus can be largely attributed to a sharp 14.0% year-on-year fall in imports, driven by lower energy and non-energy imports. The decline can likely be explained in part by government measures to curb imports and trim the current account deficit. Exports were also down sharply (-11.3% yoy) on lower energy and non-energy exports amid a more challenging external environment, with soft momentum in many developed economies.

Looking ahead, our panelists still see export growth for 2019 as a whole despite the weak start to the year, although global trade tensions could weigh on the performance. In contrast, import growth will be limp over 2019 as a whole, on a tough base effect and as government measures continue to take effect.

Indonesia Trade Balance Forecast

Last month, panelists saw exports and imports expanding 7.8% and 3.9% respectively in 2019, which would bring the trade balance to a USD 1.8 billion deficit. For 2020, the panel saw exports and imports growing 7.3% and 8.4% respectively, with a trade deficit of USD 4.2 billion. A new Consensus Forecast will be released on 19 March.