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Economist at UOB Group Enrico Tanuwidjaja and Haris Handy review the latest trade data in Indonesia.

Key Quotes

“Indonesia posted another trade surplus of USD2.4bn in May, underpinned by higher commodity prices. This marked a 13 consecutive months of trade surplus since May 2020. Exports in May rose 58.8% y/y vs. April’s 52.1%, driven mostly by mining products. Meanwhile, imports grew by 68.7% y/y in May vs. 29.2% a month earlier. The surge on exports and imports on annual basis benefited from a low base effect of last year’s pandemic-induced global trade. However, both export and import in May were lower than the previous month, largely due to the seasonal rise in trade during Ramadan and Eid festivity which taking place in April; with exports and imports falling by 10.3% and 12.2% on a month-on-month basis.”

“From January to May this year, Indonesia booked USD10.2bn trade surplus which was significantly higher than the USD4.2bn surplus recorded in 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, especially on 2H21, driven by stronger domestic consumption and increasing investment activities.”