March 15, 2023 04:54 GMT
Export Growth Slows But Should Be Supported By China Going Forward
Indonesia’s trade surplus in February widened to $5480mn from $3880mn, which was higher than expected. Bank Indonesia has cited the economy’s external resilience and strong trade surplus as supportive of the currency. It also expects the reopening of China to boost Indonesia’s exports as it is their largest destination. BI is expected to leave rates at 5.75% at its meeting this week (see MNI BI Preview - March 2023.)
- While export growth slowed to 4.5% y/y from 16.4%, this was in line with expectations and the series is volatile. The 3-month average shows a clear slowing in export growth to late 2020 rates. The February Global S&P manufacturing PMI showed falling foreign orders. Exports of mining goods and oil & gas were strong whereas agriculture and manufacturing declined.
- Imports unexpectedly contracted posting a fall of 4.3% y/y compared to consensus at +9.1% and January’s 1.3% increase. The drop was driven by an 8.1% y/y fall in raw materials whereas consumer goods rose 13.4% and capital goods +6.1%, pointing to robust domestic demand.
Indonesia trade y/y% 3mma
Source: MNI - Market News/Refinitiv
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