Indonesia posted a USD $1.02 billion trade surplus in September 2015, higher than analysts' estimates and up from a revised USD $328 million trade surplus recorded in the preceding month. It was the tenth consecutive monthly trade surplus for Indonesia. However, the country's September trade surplus is primarily the result of rapidly declining imports, reflecting weak investment growth and weak consumption in Southeast Asia's largest economy.
The latest official data from Statistics Indonesia (BPS) show that Indonesia's imports fell 7.2 percent (m/m) to USD $11.5 billion in September 2015. Compared to September 2014, imports were down by 26.0 percent (y/y) primarily on the back of falling oil & gas imports. Suryamin, Head of Indonesia's statistics agency, said that oil & gas imports declined as energy company Pertamina's new oil refining plant in Central Java started operations in September.
The rupiah plays an important factor in falling imports. Although the currency has appreciated remarkably over the past two weeks, it is still down nearly 7 percent against the US dollar so far this year, hence making imports more expensive.
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia
Meanwhile, Indonesia's exports in September 2015 declined 1.6 percent (m/m) to USD $12.5 billion from the previous month and declined 18 percent (y/y) from the same month last year. Despite the weak rupiah (which makes Indonesian exports more competitive on the global market) exports are still falling, signalling weaker global economic conditions.
Trade Balance Indonesia (in million USD):
Previously, Indonesia's central bank (Bank Indonesia) stated that it expected a trade surplus around USD $1 billion in September as the country's manufacturing exports show some improvement.
Indonesia's trade surplus in the first nine months of 2015 accumulated to USD $7.1 billion. In the same period one year earlier, Indonesia had to cope with a USD $1.67 billion trade deficit. However, as this improvement is primarily caused by weak imports, there is few reason to become overexcited.
Imports fell 19.7 percent (y/y) in the first nine months of 2015 to USD $107.9 billion from the same period last year, led by a 16.7 percent (y/y) decline in machinery equipment imports. Meanwhile, exports contracted 13.3 percent (y/y) to USD $115.1 billion in the first nine months of 2015, primarily on the back of weaker crude palm oil and coal exports.