Indonesia’s trade surplus beats forecast in August on export recovery

3:01 am Tuesday, September 17th, 2024

By Stefanno Sulaiman and Gayatri Suroyo

JAKARTA (Reuters) -Indonesia’s trade surplus rose to a three-month high in August, topping forecasts, as exports grew much faster than expected, official data showed on Tuesday.

The August trade data is among economic indicators the central bank will analyse during its two-day policy meeting starting on Tuesday. Economists polled by Reuters ahead of the trade data expected Bank Indonesia (BI) to leave rates unchanged.

The world’s top exporter of thermal coal, palm oil and nickel metals reported a surplus of $2.89 billion last month, compared with $1.96 billion expected in a Reuters poll. The surplus was the biggest since May.

Exports in August grew 7.13% on a yearly basis to $23.56 billion, Statistics Indonesia said. The median forecast was for a 3.83% annual rise last month.

The pace of the August export rise was the quickest since January 2023, according to LSEG data.

Imports were worth $20.67 billion, up 9.46% from a year earlier, compared with the poll’s expectation of an 8.15% rise.

Shipments from the country have risen in annual terms each month since April, recovering after a year where export values fell sharply following the peak of a post-pandemic commodity price boom.  

Despite the data coming in higher than expected, some economists said they still expected the BI to stand pat due to previous comments from policymakers prioritising stability and the potential for BI to wait for the Federal Reserve to cut U.S. rates.

“The widening of the surplus gives BI more confidence and we see room for BI to cut rates,” said Maybank Indonesia economist Myrdal Gunarto.

“But based on past BI statements about its focus on macroeconomic and monetary stability, we think BI would be inclined to maintain the benchmark rate at the same level at 6.25%, especially as the conclusion of its meeting tomorrow is ahead of the Fed,” he added.

Oil and gas shipments fell last month, but this was offset by an 8.7% increase in exports of manufactured goods. Also boosting the August figures was a 9.7% annual increase in coal shipments to $2.47 billion.

Imports of capital goods as well as raw and intermediary goods for further processing rose more than 11%.

(Reporting by Stefanno Sulaiman, Gayatri Suroyo and Fransiska Nangoy; Editing by John Mair and Sonali Paul)