JAKARTA- Indonesia’s trade surplus is expected to show an expansion in July after the government imposed mobility restrictions to control a spike in COVID-19 cases, squeezing exports and imports, a Reuters poll showed on Friday.
Southeast Asia’s biggest economy has been enjoying an export boom on the back of high commodity prices, allowing for a trade surplus every month since May of 2020.
The median forecast of 10 analysts in the poll was for a July trade surplus of $2.27 billion, up from the previous month’s $1.32 billion.
Export growth of 30.20 percent, on an annual basis, was forecast.
While high commodity prices still supported shipments, the estimated increase would be the lowest since February and below the more than 50 percent growth rate recorded between April to June.
Imports were seen shrinking on a monthly basis, but up 52.15 percent annually due to a low base effect.
“We expect a wider trade surplus from the previous month as imports recede following the July lockdowns in Java,” analysts with Citi Indonesia said.
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, but imports may take a hit as COVID-19 curbs imposed since July dampen domestic demand.
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, August 5.
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.
