Indonesia Macro Update - Trade Balance 02 Jul 2025
KBVS MACRO UPDATE
Wednesday, 2 July 2025
Indonesia’s Trade Surplus Soars in May ‘25, Driven by Export Momentum
Indonesia’s trade balance continued its surplus streak for the 61st consecutive month, with the surplus in May ‘25 significantly exceeding expectations and reaching USD4.30 bn (Cons: USD2.66 bn; KBVS: USD0.50 bn; Prev: USD0.15 bn). The surge in palm oil exports was also bolstered by India’s palm oil imports rising 87% MoM. At the same time, the Rupiah’s limited elasticity against the USD appeared to encourage opportunistic behaviour among importers of Indonesian products. Meanwhile, on the import side, growth remained relatively modest at 4.14% YoY (Cons: 1.10% YoY; KBVS: 2.68% YoY; Prev: 21.84% YoY).
Looking ahead, we expect the trade surplus to persist, supported by a) The gradual easing of tensions in the Middle East, b) China’s improving manufacturing PMI, c) Strong demand for animal and vegetable oils in India, d) The Rupiah's relatively stable movement amid the ongoing decline in the U.S. Dollar Index. However, on the import side, we anticipate a moderate rise in imports of oil and gas components due to lower global energy prices, particularly crude oil.
Regards,
KBVS Research Team