Indonesia’s trade surplus rose 19.8 percent annually to $2.59 billion in July, the second-highest level this year, after May, as high commodity prices buoyed exports, official data show. Statistics Indonesia (BPS) reported on Wednesday that exports reached $17.7 billion in July, up 29.3 percent year-on-year (yoy), buoyed by rising prices of commodities such as coal, tin, palm oil and crude oil.
Imports reached $15.11 billion in July, up 44.4 percent yoy, driven up by a low base effect and higher imports of consumer goods and raw materials, particularly those related to COVID-19 vaccines. “This is a sign that the economy is improving as the trade balance saw a surplus for 15 months in a row,” said BPS head Margo Yuwono.
Margo noted that export growth had slowed to 4.53 percent month-to-month (mtm) in July due to seasonal patterns, namely a correction following the Idul Fitri holidays in May. He also noted that import growth slowed to 12.22 percent mtm in July. Bank Mandiri economist Faisal Rachman said in a research note on Wednesday that annual export growth was below the market consensus forecast of 35.94 percent yoy. The export growth slowed on a monthly basis in July due to a slowdown in China’s economic activity.
The note added that annual import growth was also below the market expectation of 53.5 percent yoy. Import growth had slowed down on a monthly basis due to the public mobility restrictions (PPKM) introduced last month, which curbed domestic demand. Faisal noted that rising commodity prices, the ongoing global economic recovery and the ongoing PPKM slated to be relaxed in September were the main factors that would influence the trade balance over the year.
“We [project] a declining trend for the trade surpluses toward the end of 2021,” he said.