Indonesia’s March trade surplus expands to US$3.32 billion, April inflation eases to 2.42%

[JAKARTA] Indonesia’s trade surplus of US$3.32 billion in March was larger than expected, despite a contraction in exports, as imports grew less than anticipated amid a weaker rupiah currency and Islamic holidays, official data showed on Monday (May 4).

The March surplus was larger than both the median forecast of a US$2.41 billion surplus in a Reuters poll of economists and a US$1.28 billion surplus in February.

The resource-rich country has run sizeable surpluses in recent years, but analysts expect exports will be affected by slower global demand due to the Middle East war and as a weaker rupiah raises import costs.

The rupiah in the week of Apr 27 hit a record low of 17,385 per US dollar amid worries about the war in Iran.

Exports from South-east Asia’s largest economy in March declined by 3.1 per cent annually to US$22.53 billion, below both the 0.96 per cent increase expected in the poll and a 1.01 per cent rise in February.

Exports were down due to lower shipments of mining products, such copper and lignite, as well as goods such as cocoa, coffee and tea, among others, Statistics Indonesia senior official Ateng Hartono told reporters.

Shipments were probably affected by 2025’s front-loading of exports to the US, compounded by slower global demand, particularly from China, Bank Permata economist Faisal Rachman said.

“Escalating geopolitical tensions in the Middle East pose additional downside risks by weakening global trade flows and external demand, while also raising fuel prices and, in turn, increasing import costs,” he said.

Imports were up 1.51 per cent to US$19.21 billion, compared with a forecast of a 10 per cent increase.

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Economists said imports in March returned to normal after businesses front-loaded purchases ahead of the Eid Al-Fitr holidays in the month’s second half, and in anticipation of supply chain disruption due to rising geopolitical tension.

The Iran war has not dramatically impacted the March trade data, said Maybank Indonesia economist Myrdal Gunarto, but he anticipated an increase in April imports due to higher fuel prices.

“We see the possibility that Indonesia’s trade surplus could narrow, because there is a surge in fuel imports as oil prices have risen sharply.”

Inflation

The April annual inflation rate eased to 2.42 per cent from 3.48 per cent in March, the data showed, and was also below economists’ expectations of a 2.76 per cent rate.

The April reading was helped by a fading low-base effect due to electricity tariff discounts early last year that affected inflation in previous months.

Annual core inflation, which strips out government-controlled prices and volatile food prices, cooled slightly to 2.44 per cent, compared to 2.52 per cent in the previous month and 2.52 per cent in the Reuters poll.

The Iran war triggered global spikes in prices of oil and other commodities, but the government has boosted spending on subsidies to shield most consumers from rising fuel prices.

The central bank has said inflation is expected within its 1.5 to 3.5 per cent target range until 2027 due to subsidies and a joint effort with government officials to control food prices.

Bank Indonesia will probably be able to keep its key policy rate unchanged at 4.75 per cent if the government maintained prices of subsidised fuel, Myrdal added. REUTERS