Indonesia trade surplus widens to US$2.2b as exports surge 51.9% in April

INDONESIA'S trade surplus widened in April to US$2.2 billion as exports surged 51.9 per cent year on year, partly due to the low base last year and outperforming economists' expectations.

This compares with the 30.5 per cent year-on-year jump in exports in March, which led to a US$1.6 billion surplus. Private sector economists had expected a 40.7 per cent expansion, according to a Bloomberg poll.

At the same time, imports grew 29.9 per cent year on year, following a 25.7 per cent rise in March.

UOB economist Enrico Tanuwidjaja noted that Indonesia's positive performance in exports and imports is due in part to China, a crucial trading partner, playing a big role in supporting both supply and demand.

"The largest increase in non-oil and gas exports for April, compared to March, was the exports of iron and steel, as China's steel production continued to expand," said Mr Tanuwidjaja.

In contrast, the largest decline was in the export of palm oil, as lockdowns in India dented demand, he said.

Although exports had strong sequential expansion, Barclays regional economist Brian Tan estimated that imports experienced a broad-based decline of 6.4 per cent month-on-month after seasonal adjustment, partly reversing the 13.4 per cent jump in March.

"The outperformance in exports and surprising weakness in imports suggest the current account deficit may not widen by as much as we expect this year," said Mr Tan.

Sung Eun Jung, an economist at Oxford Economics, believes a strong global growth recovery and rising commodity prices will buttress Indonesia's exports for the remainder of the year.

Ms Jung added that progress on coronavirus containment domestically also lays ground for a sustained recovery in domestic demand.

"However, pandemic challenges persist amid new virus variants, renewed lockdowns in neighbouring economies, and the recent slowdown in the pace of vaccination in Indonesia due to supply shortages," she said.