Indonesia books $5.76bn trade surplus in Aug, above expectation

JAKARTA: Indonesia recorded a $5.76 billion trade surplus in August, the biggest in four months and larger than expected, as exports and imports beat forecasts to reach record highs, official data showed on Thursday.

A Reuters poll had expected a surplus of $4.09 billion. The resource-rich country has reported a trade surplus every month since May 2020, with exports boosted by the upward cycle in commodity prices.

The August surplus was the largest since April’s $7.56 billion, which was the biggest on record for Southeast Asia’s largest economy.

Exports rose 30.15% on a yearly basis in August to $27.91 billion, with shipments of oil and gas and mineral products recording the biggest increase, Statistics Indonesia data showed, against the poll’s forecast of 19.19% growth.

Imports were worth $22.15 billion, up 32.81% on a yearly basis, versus the poll’s 30.60% growth prediction. Analysts had warned that the surplus would narrow towards the end of 2022 as prices of some of Indonesia’s top commodities such as palm oil and iron ore start to ease, even as prices of coal and natural gas have stayed high.

In August, bigger export volume of some products, such as palm oil and steel, offset the price decline, said deputy head of Statistics Indonesia, Setianto, who uses only one name.

Palm oil shipments reached 3.6 million tonnes last month, compared with less than 3 million tonnes each month typically over the past few years.

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Despite the surprisingly large surplus, Bank Mandiri’s economist Faisal Rachman said he maintained his view that the trade gap will shrink due to falling global commodity prices amid risks of global recession.

Still, with a nearly $35 billion surplus in January-August, Faisal predicted Indonesia would record a current account balance within a range of 0 to 0.45% of gross domestic product in 2022.

DBS Bank’s economist Radhika Rao concurred, saying Indonesia “is likely to register a second consecutive year of current account surplus, boding well for external balances and currency.”