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Trade surplus hits 14-month low as imports surge, but that might be good news
The trade deficit with China hit US$1.7 billion in July, more than twice as high as a year earlier, driven by imports of mechanical equipment, electrical goods and vehicles.
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Delivered: Goods are unloaded from a cargo vessel on March 24, 2024, at the Jakarta International Container Terminal of Tanjung Priok Port in North Jakarta. (Antara/Muhammad Adimaja)
I
ndonesia’s trade balance has remained positive for 51 consecutive months, but the gap between the country’s exports and imports plunged to just US$0.47 billion in July.
That marks the lowest surplus since May last year and a massive drop from the $2.4 billion surplus logged in June, according to Statistics Indonesia’s (BPS) latest monthly trade report, published on Thursday.
The shrinking surplus came as a surprise to some, including Moody’s Analytics, which had instead forecast an increase to $2.5 billion, while the consensus of economists polled by Bloomberg showed a median forecast of $2.47 billion.
The BPS data showed that Indonesian exports grew by 6.46 percent year-on-year (yoy) to $22.21 billion in July, but imports rose at a faster pace of 11.07 percent yoy to $21.74 billion.
The jump was mainly driven by an influx of plastics and articles thereof, as defined under Harmonized System (HS) code 39, machinery and mechanical appliances (HS code 84) and electrical machinery and equipment (HS code 85), which increased by 20.87 percent, 8.66 percent and 2.13 percent, respectively, from the same month last year.
Imports of intermediate goods and capital goods recorded annual growth of 15.17 percent and 2.04 percent, while incoming shipments of consumption goods dropped 0.81 percent yoy.
“The annual increase in oil and gas imports was caused by a surge in volumes and average aggregate prices. One category that saw a significant jump is [petroleum products], which increased by 30 percent. Meanwhile, the surge in non-oil and gas products was driven by 31.74 percent hike in volume,” said interim BPS head Amalia Adininggar Widyasanti.
