Weak Exports But Weaker Imports Drives Surplus Widening

Indonesia’s trade surplus for June widened a lot more than expected to $3.46bn from $0.43bn due to a slump in imports but the data details were soft. Exports fell a more-than-expected 21.2% y/y after rising 1% in May due to lower commodity prices, while imports fell 18.4% y/y after rising 14.4%.

• Exports excluding oil & gas fell 21.4% y/y with crude oil down 31.1% and gas 22.4% due to lower prices. Mining exports fell 37.5% y/y and manufacturing -16.4%. H1 2023 exports fell 8.9% y/y. Oil & gas imports were 39.5% y/y lower and consumer goods -6.6% y/y but capital goods rose 4.1% y/y. Imports fell 6.4% y/y in H1.
• Non-oil exports to Indonesia’s three largest destinations were weak in June with China down 4% m/m and -10% y/y, Japan -23.2% y/y and US -20.6% y/y. Indonesia has been talking with India to improve trade ties to diversify away from China, as the Chinese economy has disappointed.
• Non-oil imports from China fell 20.6% y/y, from Japan -4.2% y/y, and US -1.2% y/y.