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UOB Group’s Economist Enrico Tanuwidjaja and Haris Handy review the recently published trade data in Indonesia.

Key Quotes

“Indonesia’s exports and imports boomed in March, reaffirming economic recovery and demand pick up from overseas and domestic markets as they emerge from the pandemic. Exports grew by 30.5% y/y in March vis-à-vis 8.5% growth in the previous month; given the tailwind from recovery of Indonesia’s trading partner, mainly China (with exports to China grew by 63.0% y/y for January – March) and most other trading partners as well.”

“Meanwhile, imports to Indonesia jumped 25.7% y/y in March vs. February’s 14.9%. This was the second straight month of growth for inbound shipments and the fastest pace since July 2018; amid strengthening domestic demand ahead of the fasting month of Ramadhan and Eid Festival, and as the COVID-19 vaccination program run smoothly.”

“Overall, this helped Indonesia post another monthly trade surplus of USD1.6bn in March. From January to March this year, Indonesia booked USD5.5bn trade surplus which was significantly higher than the USD2.6bn 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 (especially in 4Q20) 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 domestic consumption and increasing fixed capital investment activities.”