Today (15/06) Statistics Indonesia (BPS) announced that Indonesia's May trade balance showed a surplus of USD $375.6 million, below analyst estimates (at USD $680 million) and below the (revised) USD $660 million trade surplus recorded in the preceding month. Although having a trade surplus is good, there remain concerns about Indonesia's falling exports and imports as these declines are signs of weakening domestic and global economic activity.
Indonesia's imports fell 4.12 percent (y/y) to USD $11.14 billion in May 2016. Meanwhile the nation's exports fell 9.75 percent to USD $11.51 billion, or the 20th straight month of decline. Indonesia's export performance is dragged down by low commodity prices amid weak global demand and sluggish global growth. Falling exports curtail both Indonesian people's purchasing power and Indonesian companies' investment plans, hence imports continue to fall accordingly.
However, the 4.12 percent (y/y) decline in Indonesia's May imports constitutes the slowest pace of contraction since October 2014. This is regarded the cause of rising imports ahead of this year's Ramadan and Idul Fitri celebrations (in the June and July period) and could imply that Indonesia's purchasing power has been improving in 2016 in line with the nation's expected accelerated economic growth.
BPS also revised Indonesia's April 2016 export-import figures. The April trade surplus was now put at USD $660 million (down from the initial USD $670 million that was reported earlier), with April's exports amended to USD $11.47 billion (from USD $11.45 billion previously), while Indonesia's imports were updated to USD $10.81 billion (from USD $10.78 billion).