Indonesia: Merchandise exports drop softens in December
Merchandise exports fell 7.7% annually in December, on the heels of November’s 8.8% drop. December’s outturn marked the most moderate contraction since May 2023. Meanwhile, merchandise imports decreased 6.8% over the same month last year in December (November: +3.4% yoy).
As a result, the merchandise trade balance improved from the previous month, recording a USD 3.9 billion surplus in December (November 2023: USD 3.4 billion surplus; December 2022: USD 4.5 billion surplus). Lastly, the trend pointed down, with the 12-month trailing merchandise trade balance recording a USD 47.6 billion surplus in December, compared to the USD 48.1 billion surplus in November.
ING analyst Nicholas Mapa commented on the outlook:
“While Indonesia’s trade balance remains in a healthy surplus, its fading size points to less support for the IDR in the near term. The IDR had previously been supported by sizeable trade surpluses in the past but it appears that the currency will be unable to bank on this support as much as it did previously. Fading support from the trade surplus suggests that Bank Indonesia may need to keep policy rates at current levels to bolster the IDR in the near term.”