Trade Balance Indonesia: $900 Million Surplus in June 2016Monday, July 18, 2016 > 11:18:50
Indonesia's latest trade data beat forecasts by quite a distance. According to Statistics Indonesia (BPS), Indonesia's trade balance recorded a monthly surplus of USD $900.2 million in June 2016. Previously, median forecasts expected a USD $300 million surplus. Meanwhile, the nation's trade surplus more than doubled in June from the monthly surplus in the preceding month, supported by strong exports of electronics, auto parts, finished garments, and rubber products. Despite this positive result, there remain some concerns.
Although Indonesia's trade surplus has grown to USD $3.59 billion in the first half of 2016, Southeast Asia's largest economy has seen its exports and imports contract for the past 21 months. Exports have been declining due to weak global demand and low commodity prices, while imports have been on the decline due to slowing economic growth in Indonesia (this causes a drop in domestic demand for imports of capital goods as well as consumer goods). However, as imports have been dropping more severely than exports, Indonesia has seen a trade surplus since 2015.
There is also some room for optimism. Suryamin, Head of BPS, said the export and import figures of Indonesia in June 2016 are the highest figures so far this year. This signals that both foreign demand for Indonesian products and domestic demand for foreign products has grown. Imports of capital goods (which are used to produce other products) rose 16 percent (y/y), a signal that investment in Indonesia has grown.
Regarding the month of June 2016, Indonesia's exports were recorded at USD $12.92 billion, down 4.42 percent year-on-year (y/y) from June 2015. Meanwhile, the nation's imports were recorded at USD $12.02 billion in June 2016, down 7.41 percent (y/y) from the same month one year earlier.
Besides heavier dropping imports, Indonesia's oil & gas balance - despite still showing a deficit - was supported by the slightly recovering crude oil price in the first half of 2016. Rising crude oil also has a positive impact on prices of other commodities.