Indonesia’s August trade surplus widest in nearly 3 years on slide in imports
The country has enjoyed a relatively large trade surplus for the past few months as exporters front-loaded shipments to the US
[JAKARTA] Indonesia recorded a bigger than expected US$5.49 billion trade surplus in August, the largest monthly number in almost three years, as a sharp drop in imports more than made up for slowing export growth, official data showed on Wednesday (Oct 1).
Economists polled by Reuters had expected a US$4 billion surplus in August. The country had a US$4.17 billion surplus in the previous month.
South-east Asia’s largest economy has enjoyed a relatively large trade surplus for the past few months as exporters front-loaded shipments to the US in a bid to beat the tariff deadline of Aug 7.
August exports grew 5.78 per cent annually to US$24.96 billion, the weakest growth in four months but slightly faster than the 5.5 per cent expected by economists in the poll, the data showed.
US-bound shipments were worth US$2.72 billion in August, down 12.4 per cent from July, but still up about 3 per cent from the same month in 2024.
The US, a major export market for Jakarta, set a 19 per cent tariff rate on Indonesian products, in line with regional peers and well below the 32 per cent first flagged in April.
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The overall figure for August shipments was also bolstered by rising exports of palm oil, nickel, gold and jewellery.
Imports dropped 6.56 per cent to US$19.47 billion, far more than the 1.6 per cent decline predicted in the poll, with imports of gold and jewellery, iron and steel, organic chemicals and cereals registering the biggest fall.
The rupiah gained slightly after the data, to trade almost flat from yesterday’s close.
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Bank Permata economist Faisal Rachman expected exports for the rest of the year to soften due to shipments to the US potentially declining and subdued global demand, particularly from biggest buyer China.
Imports could also rise on Jakarta’s commitment to buy American products, a potential influx of Chinese goods, and the government’s pro-growth policy strengthening import demand, Faisal said.
Meanwhile, Indonesia’s annual inflation rate in September picked up to 2.65 per cent from 2.31 per cent, still well within the central bank’s 1.5-to-3.5 per cent target range. The poll had expected 2.50 per cent.
The acceleration was due to higher food and transportation prices.
Bank Indonesia has since September 2024 cut interest rates by a total of 150 basis points, taking advantage of low inflation to aid economic growth, although some investors worry the central bank is under pressure from the government to ease monetary policy.
The annual core inflation in September was 2.19 per cent, matching expectations. REUTERS
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