Indonesia May trade surplus shrinks to smallest in 3 years
INDONESIA’S trade surplus in May narrowed to the smallest in three years, even as exports and imports performed better than expected, data from the statistics bureau showed on Thursday (Jun 15).
The resource-rich country last year saw exports jump to a historic high on rising global commodity prices.
The prices of commodities such as coal and palm oil have since eased, prompting economists to predict that exports from South-east Asia’s largest economy will fall, its trade surplus will shrink, and economic growth will slow this year.
In May, Indonesia reported a surplus of about US$440 million, the smallest since April 2020, and significantly less than the US$3.02 billion surplus economists had expected in a Reuters poll and a US$3.94 billion surplus recorded in April.
Imports last month were worth US$21.28 billion, up 14.35 per cent on a yearly basis. The poll had predicted an 11 per cent yearly drop.
There was an annual increase of more than 60 per cent in imports of capital goods in May.
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Indonesia exported US$21.72 billion worth of goods in May, up 0.96 per cent from the same month a year earlier, beating the poll’s forecast for an 8.7 per cent annual drop .
Josua Pardede, Bank Permata’s economist, predicted a further shrinking of the trade balance for the rest of 2023, with a full-year trade surplus within a range of US$38 billion to US$43 billion, compared with last year’s US$54.5 billion.
“The risk of economic slowdown in our trade partners such as the United States and China will become a challenge to our exports going forward,” he said.
Maybank Indonesia economist Myrdal Gunarto said Indonesia’s bauxite export ban, which took effect earlier this month, would also hit exports at a time when domestic demand for imports is rising. REUTERS
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