The government should not assume that the trade surplus it recorded in February will be sustained as global economic uncertainty will put continuous pressure on Indonesia’s exports, economists have warned.

The country recorded a US$329.5 million surplus in February, thanks to a steep drop in imports, Statistics Indonesia (BPS) announced on Friday.

The surplus marks a turnaround from the trade deficit of $1.06 billion booked in January.

Exports declined 10.03 percent month-to-month (mtm) to $12.53 billion in February, driven by a 9.85 percent mtm decline in non-oil and gas exports to $11.44 billion and an 11.85 percent decline in oil and gas exports to $1.09 billion.

However, imports dropped much more, falling 18.61 percent mtm to $12.2 billion, due to a 20.14 percent mtm decline in non-oil and gas imports to $10.6 billion and a 6.28 percent mtm decline in oil and gas imports to $1.55 billion.

Mohammad Faisal, an economist at the Center of Reform on Economics (CORE) Indonesia, said the trade surplus recorded in February was not “healthy” and would not be sustainable.

While there was a drop in imports, he said the decline occurred in raw and auxiliary materials as well as capital goods, suggesting that domestic production was pressured.

“With this kind of structure in our trade balance, it is quite possible that next month, the country will record a trade deficit again,” he said in Jakarta on Friday.

In a press briefing on Friday, BPS head Suhariyanto said the decline in imports was recorded in certain categories.

Consumer goods imports dropped 18.77 percent mtm in February, followed by declines in imports of raw and auxiliary materials and capital goods by 7.6 percent mtm and 2.32 percent mtm respectively.

Echoing Mohammad’s view was Bahana Sekuritas chief economist Satria Sambijantoro, who said the double-digit drop in both exports and imports should not be seen in a positive light.

“Such a concern was shared in the currency market as the rupiah, despite the hefty trade surplus, was relatively stable on Friday, appreciating by a mere 0.12 percent to hit Rp 14,260 per US dollar,” he wrote in a research note.

Exports were at their lowest value since June 2017 due to the weak global demand, primarily for commodities and manufacturing products, he said.

“We tracked back the trade data to 1983, and this is the first time in history that Indonesia’s export growth for both year-on-year and mtm numbers were negative for four consecutive months — something that did not occur even during the 1997-1998 financial crisis,” he said.

Bank Central Asia chief economist David Sumual said Indonesia should increase exports to non-traditional destinations because global demand of commodities, especially from China — Indonesia’s biggest trade partner — remained weak.

“We have to find new market opportunities, diversify products to other export destinations,” he said. “We are too focused on the United States and China. There are actually many other countries to explore, such as Scandinavian countries and those in the Middle East.”

Responding to the trade surplus, Coordinating Economic Minister Darmin Nasution told reporters at his office on Friday that the government would not be complacent.

“We have yet to see how this result could refer to a better and more sustainable [trade balance] in the future,” Darmin said. “Our hard work is not yet enough and we need more of it to see consistent improvements in the trade balance and current account.”

He added that stakeholders should be more attentive over the significant drop in imports, as there was a decline in machinery imports, which could spell productivity issues in the manufacturing sector.

BPS data show that imports of machineries and electrical appliances plunged by 27.8 percent mtm and 17.45 percent yoy in February to $1.24 billion.

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