Trade Surplus Narrows, Exports To Major Partners Remain Strong

The Indonesian trade surplus shrank for the second consecutive month in December to $3.89bn from $5.13bn the previous month. This was the lowest since May. Exports grew 6.6% y/y supported by oil and gas, whereas non-energy exports were only 5% y/y higher weighed down by a 2.7% drop in export prices. While the 3-month average remains elevated, a narrowing trade surplus would be a challenge for the IDR in 2023 and thus for Bank Indonesia.

• Imports fell 6.6% y/y, which was less than expected, but were up on the month (nsa).
• While export growth is off of its extremely high peaks to Indonesia’s major trading partners, it is still strong except to the US (2^nd largest) which is down 22%y/y. Export growth to China moderated to 13.4% y/y but to Japan it rose to 22.5% y/y and to India +39.7% y/y.