Indonesia: Positive trade figures in February – UOB

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

Key Quotes

“Indonesia posted another trade surplus of USD2.0bn in February as Indonesia’s main commodity prices (i.e., iron and steel, crude oil) picked up and trading partners such as US and Taiwan, gradually recovered from the coronavirus pandemic. This marked a tenth-straight month of trade surplus since May 2020. Exports in February remained firm, despite slightly slowed by +8.6% y/y vis-à-vis January’s +12.2%. Meanwhile, imports grew by +14.9% y/y in February vs. January’s - 6.5%, given the low base effect of February 2020 last year when COVID-19 started to hit globally. On month-on-month bases exports and imports contracted by -0.2% and -0.5%, respectively, given lunar new year holiday and shorter day in February, which reduce production.”

“From January to February this year, Indonesia booked a USD4.0bn trade surplus which was significantly higher than the USD1.9bn surplus recorded over the same period last year. Indonesia's monthly trade surpluses, which came via stronger export recovery from the impact of the COVID-19 pandemic amid weak import demand, have helped the country narrow its current account deficit. Nonetheless, we expect imports to pick up, especially later in 2H21, as economic growth accelerates, driven by stronger domestic consumption and increasing fixed capital investment activities.”