Indonesia's Statistics Agency (BPS) announced that the nation's trade surplus improved to USD $1.22 billion in September 2016, the highest monthly surplus over the past 13 months. The rising surplus was primarily the result of a growing non-oil & gas trade surplus. However, both Indonesia's exports and imports contracted on an annual basis. But because imports declined more rapidly, Southeast Asia's largest economy managed to record a solid trade surplus in September, beating analysts' estimates, by far (that averaged around USD $450 million).
Imports into Indonesia stood at USD $11.30 billion in September, down 2.26 percent year-on-year (y/y) from the same month one year earlier. This was not in line with estimates. Based on a Reuters poll, imports were expected to rise 3.76 percent (y/y) last month. Falling imports basically signal that purchasing power and investment remain subdued in Indonesia. Statistics Indonesia stated that in particular imports of machinery, mechanical equipment, vehicles, spare parts, and fertilizers fell.
Meanwhile, exports from Indonesia reached USD $12.51 billion, down 0.59 percent (y/y) from September 2015. This result was better than had been forecast by the Reuters poll (which showed that analysts expected a 1.61 percent decline). The 0.59 percent (y/y) drop in Indonesia's exports was attributed to lower exports of jewelry/gems, machinery/mechanical appliances, iron ore, crust and metal, knitted goods, and oily seeds.
In the first nine months of 2016, Indonesia's total imports reached USD $98.69 billion, down 8.61 percent (y/y) from the same period a year ago. Meanwhile, total export fell 9.41 percent (y/y) to USD $104.36 billion over the same period. As a result, Indonesia's cumulative trade balance recorded a surplus of USD $5.67 billion in the January-September 2016 period. Although the surplus is enjoyable, concerns persist about weak global demand and low commodity prices (impacting negatively on Indonesia's export performance) as well as bleak purchasing power and investment (impacting on Indonesia's import performance).
Statistics Indonesia also informed that it revised the August 2016 trade surplus to USD $360 million.
Indonesia's central bank (Bank Indonesia) released a statement on its website in which it welcomed the trade surplus. The lender of last resort is possibly more focused on improving the current account deficit than worrying about Indonesia's persistently dropping exports and imports.