Based on the latest data from Indonesia’s Statistical Agency (Badan Pusat Statistik, BPS), which were released on 16 November 2020, Indonesia recorded an impressive USD $3.61 billion trade surplus in October 2020. The surplus is at a level we had not seen since the final stages of the 2000s commodities boom (late-2011 to be exact).
It is interesting that the economic recession and major disturbances to international trade in fact seem to have a positive effect on Indonesia’s trade balance. What does that tell us?
Well, considering the surplus is caused by massively plunging imports (which – by far – exceed the decline in the country’s exports), it tells us that the COVID-19 crisis particularly hits the demand side of the Indonesian economy. With the Indonesian consumer being less eager to consume, the need for imports of consumer goods falls. Especially the middle class and upper class have reduced their consumption habits due to the COVID-19 crisis, and instead, have been saving money on bank accounts.
Indonesia’s Balance of Trade (above zero = trade surplus):
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