Indonesia’s exports and imports likely continued to surge in August, driven by high prices of the country’s main commodities like coal and palm oil, a Reuters poll showed on Tuesday.
A survey of 18 economists forecast the economy’s August trade surplus had shrunk to $2.36 billion from $2.59 billion in July.
Southeast Asia’s biggest economy has been enjoying an export boom on the back of robust commodity prices, allowing for a trade surplus every month since May of 2020.
Economists expected 36.9 percent annual growth in August exports, accelerating from 29.32 percent in the previous month. August imports were seen rising 45.1 percent on a yearly basis, compared with 44.44 percent in July.
Some economists have said high commodity prices and a global economic recovery will likely allow resource-rich Indonesia to book big export earnings for the remainder of the year.
However, with the country relaxing some COVID-19 curbs since August, analysts also expect imports to rise.
Indonesia pulled out of recession in the second quarter, reporting its strongest annual growth rate in 17 years, but analysts warned its economic recovery will suffer a setback due to a recent surge in COVID-19 infections.
Southeast Asia’s largest economy grew 7.07 percent in the April-June quarter compared with a year earlier, its first expansion in five quarters, Statistics Indonesia reported on Thursday.
The expansion rate beat a 6.57 percent forecast by analysts in a Reuters poll and was the highest since the October-December quarter of 2004. The first quarter’s contraction was revised to 0.71 percent.
Surging exports – including impressive 56 percent growth in commodity shipments – a rebound in consumption and investment, and bigger government spending boosted activity.
However, the statistics bureau said the high growth rate was also due to low base effects when compared to the weak pandemic-stricken second quarter last year.
Despite the better-than-expected outcome, analysts are downgrading their outlooks for the economy due to the virus’ resurgence and mobility restrictions imposed since July.
Indonesia recorded a grim milestone of more than 100,000 deaths from COVID-19 on Wednesday, with 3.57 million people infected, though health experts believe the true numbers may be far higher.
“Indonesia’s GDP bounce will be short-lived,” said Krystal Tan, an economist with ANZ who is among those pencilling in slower growth this year. ANZ’s new forecast is 3.8 percent, down from 4 percent.
“The pace of recovery will be capped until COVID-19 risks fade.”
The central bank had already lowered its projection to a range of 3.5 percent to 4.3 percent, from 4.1 percent to 5.1 percent, slightly below the government’s 3.7 percent to 4.5 percent outlook. Indonesia’s economy shrank last year for the first time since 1998, by 2.1 percent.
