Indonesia: Merchandise exports grow at a faster rate in January
Merchandise exports expanded 16.4% year-on-year in January (December: +6.6% year-on-year). Meanwhile, merchandise imports rose 1.3% in annual terms in January (December: -7.0% yoy).
As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 3.9 billion surplus in January (December 2022: USD 4.0 billion surplus; January 2021: USD 1.0 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 57.4 billion surplus in January, compared to the USD 54.5 billion surplus in December.
Commenting on the release, Nichlas Mapa, senior economist at ING, stated:
“Today’s trade report comes on the heels of reports that Indonesia will soon be requiring certain exporters to keep a portion of export earnings onshore in a bid to help boost the domestic supply of foreign currency. […] Uncertainty regarding the measure and the possibility of this regulation being pulled abruptly may result in episodes of volatility for the currency, especially if some market participants view this as a form of capital control. The IDR may be facing diminished support from the trade and current account surpluses this year but the currency could be steadied by renewed foreign investor flows should sentiment towards emerging markets improve substantially in the coming months.