Indonesia: Trade surplus extends the uptrend in June – UOB

Economist Enrico Tanuwidjaja and Haris Handy at UOB Group assessed the latest trade results in Indonesia.

Key Quotes

“Indonesia reported another month of trade surplus of USD1.3bn in June 2020 following the USD2.0bn surplus (revised figure) in May. June’s exports rebounded by 2.3% y/y from May’s - 29.5%, on the back of returning demand from Indonesia’s main trading partners i.e. China, US, Japan, Singapore, and India. On the other hand, imports contracted less at -6.4% y/y in June vs. -42.2% in the previous month, indicating stronger domestic demand on the last month of 2Q20, after the government decided to partially ease the large-scale social restriction.”

“From January to June of this year, Indonesia booked a USD5.5bn trade surplus which was significantly higher than the USD1.8bn deficit recorded over the same period last year. As such, this may continue to improve Indonesia’s trade balance, thus shrinking the Current Account Deficit (CAD) to our forecast at -1.5% of GDP this year.”