Macro Economic

Indonesia Macro Update - Trade Balance 16 Nov 2023

Fikri C. Permana 16 November 2023

Thursday, 16 November 2023

Trade Surplus Sustained, China Draws Closer to Indonesia

The increase in exports by 6.76% mom in Oct '23, despite a concurrent rise in imports by 7.68% mom, has sustained a trade surplus at USD3.48 bn (Cons: USD2.83 bn, KBVS: USD3.30 bn, Prev: USD3.42 bn). This has driven the Indonesia’s FOB export value to reach USD22.15 bn (prev: USD20.75 bn), meanwhile on the import side, Indonesia's CIF import value reached USD18.67 bn (prev: USD17.34 bn) in Oct '23.

We anticipate further propulsion for Indonesia's economy, align with the ongoing recovery in the Chinese economy, as the interconnection between Indonesia and China's trade has strengthened. Moreover, the Chinese industrial production in Oct '23 improving to 4.6% YoY (Cons: 4.4% YoY, Prev: 4.5% YoY) – alongside the increased Production&Business Activities Expectation Index in the same month to 55.6 (prev: 55.5). Additionally, with China's stable inflation at 0.0% YoY in Oct '23, followed by the CNY depreciation by 4.97% (ytd, as of 15 Nov '23) against the USD, it is expected to lower the risk of imported inflation transmission from China. Conversely, it is also expected to increase the relative competitive advantage of Indonesian export products to that country. This anticipation is also supported by the optimization of the LCT between Indonesia and China.


Fikri C Permana - KBVS Research Team