JAKARTA- Indonesia’s trade surplus likely fell further last month to $3.27 billion as imports rose ahead of the Muslim fasting month of Ramadan, when consumption typically peaks, a Reuters poll showed on Tuesday.
Southeast Asia’s largest economy has been recording trade surpluses every month since May 2020, but they have narrowed in in recent months due to moderating commodity prices. January’s surplus was $3.87 billion.
Indonesia is the world’s biggest exporter of thermal coal and palm oil. It is also a top supplier of other commodities, like tin, copper, rubber and nickel products.
Export growth in February was seen slowing further to 5 percent on a yearly basis, compared with the previous month’s rate of 16.37 percent, according to a median forecast of 17 economists.
Meanwhile, February import growth was seen jumping to 9.74 percent from 1.27 percent in January.
Ramadan in Indonesia, the world’s largest Muslim-majority country, will start next week.
Faisal Rachman, an economist with Bank Mandiri, said rising imports reflected companies’ preparations for Ramadan and post-pandemic recovery of manufacturing activities.
Mandiri predicted Indonesia might post narrower monthly trade surpluses going forward due to the decline in commodity prices, which could swing its current account to a deficit of around 1.1 percent of GDP this year, compared with a 1 percent surplus in 2022.
Indonesia’s economic growth climbed to its strongest in nine years last year fuelled by revived spending from the lifting of pandemic restrictions and as a global commodity boom sent exports to a record high.
But momentum slowed in the final quarter as prices moderated, and weaker global demand, higher inflation and a rise in interest rates could pose a drag on activity this year.
Southeast Asia’s largest economy expanded 5.31 percent in 2022, Statistics Indonesia data showed on Monday, its best annual growth rate since 2013, and faster than the 5.29 percent expected in a Reuters poll.
In the fourth quarter, gross domestic product expanded 5.01 percent on an annual basis, compared with 4.84 percent growth predicted by the poll and 5.72 percent in the previous three months. The annual rate was the slowest since the third quarter of 2021, the statistics agency said.
The resource-rich economy gained from high global commodities prices in the aftermath of the Russia-Ukraine war that aided the rupiah and improved the country’s current account, but global demand is faltering. – Reuters
