Amid a high degree of global uncertainty (looming economic recessions in the West, global stagflation, the Russo-Ukrainian war, and rising interest rates) and domestic troubles (rising inflation as a consequence of the increase in prices of key subsidized fuels per 3 September 2022, Bank Indonesia’s higher benchmark interest rate, and the weak rupiah rate that makes imports more expensive), there are serious chances of seeing a decline in international demand for Indonesian export items (especially commodities) as well as a decline in domestic demand for imports from abroad.

This would exhibit a sharp contrast because over the past year (or so) Indonesia’s export and import performance has been very strong thanks to high international commodity prices, and the (economic) rebound from the COVID-19 crisis.

So, with the October 2022 data in hand, can be now confirm whether we are seeing a tipping point, or, were the weak September data part of a seasonal phenomenon?

Well, it is still too soon to draw a definite conclusion. However, there is at least one noticeable difference this year that could point at a tipping point.

In September 2021 we also saw a drop in exports from Indonesia compared to the previous month. Table 1 (below) shows that Indonesia exported a total of USD $20.6 billion in September 2021, which is less than USD $21.4 billion in August 2021. The following month, however, Indonesian exports rebounded to USD $22.0 billion (in October 2021). This seems to be a seasonal pattern because if we look back at the 2018 and 2019 data (the 2020 data were too distorted by the COVID-19 crisis, and therefore unusable), then we see the same pattern (namely: a decline in September exports from August, but followed by a strong rebound in October).


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