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UOB Group’s Economist Enrico Tanuwidjaja and Haris Handy comment on the recently published trade balance results in Indonesia.

Key Quotes

“Indonesia’s exports and imports continue its recent positive performance as the global economic recover; with China, a crucial trading partner of Indonesia, playing a big role in supporting both supply and demand. Exports grew by 51.9% y/y in April vis-à-vis 30.5% growth in the previous month underpinned by higher demand and the surge of commodity prices; mostly exports of iron, steel, and precious metals. Moreover, imports to Indonesia rose by 29.9% y/y in April vs. March’s 25.7% (the third straight month of growth in inbound shipments and the fastest pace since July 2018) attributable to significantly higher imports of consumer goods and raw-auxiliary goods; despite imports slightly dropped 3.0% from a month earlier as imports of capital goods fell.”

“Overall, this brought Indonesia to post another trade surplus of USD2.2bn in April, widened from USD1.6bn in the previous month. From January to April this year, Indonesia booked USD7.7bn trade surplus which was significantly higher than the USD2.2bn surplus recorded over the same period last year. The country managed to narrow its current account deficit (CAD) last year, attributable to stronger exports recovery while imports were largely subdued amid weak domestic demand. Nonetheless, we expect CAD to widen this year, with imports picking up further driven by stronger consumption and increasing investment activities.”

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