Macro Economic

Indonesia Macro Update - Trade Balance 15 May 2024

Fikri C. Permana 15 May 2024

Tuesday, 15 May 2024

Apr ’24 Trade Surplus Remains Favorable For Rupiah Stability

Indonesia recorded a trade balance surplus of USD3.56 bn in Apr ‘24, marking the 48th consecutive month of surplus. This was driven by export growth of -12.97% mom or 1.72% YoY (Cons: 4.36% YoY, KBVS: 1.61% YoY, Prev: -4.19% YoY), and import growth of -10.60% mom or 4.62% YoY (Cons: 8.69% YoY, KBVS: 17.12% YoY, Prev: 12.76% YoY).

The monthly decline in exports was driven by the normalization of Precious Metals & Jewelry/Gemstones (HS71) exports in Apr ‘24. Other notable declines including Footwear (HS64) by -21.66% mom, Vehicles and Parts (HS87) by -19.20% mom, and Various Chemical Products (HS38) by -9.40% mom.On the import side, the decline in Oil and Gas imports by -11.01% mom was also accompanied by a decrease in Non-Oil and Gas imports of -10.51% mom.

Unfortunately, the favorable trade surplus in Apr ‘24 was accompanied by a decrease in FX reserves by USD4.18 bn in the same period. Looking forward, we expect that the attractive outcomes of the foreign exchange term deposit auctions (TD Valas), Bank Indonesia Certificates (SVBI), and Sharia Bank Indonesia Certificates (SuKBI) will help channel the trade surplus into the domestic economy more effectively. Additionally, we anticipate a recovery in exports with the stabilization of coal and CPO prices, while imports are expected to remain sluggish due to limited imports of onions and sugar, alongside the implementation of Ministry of Trade Regulation No. 7/2024. Thus, it is hoped that the Rupiah will be more stable going forward.


Fikri C Permana - KBVS Research Team