Friday, August 11, 2017

FW: Indonesia's Trade Outlook August 2017


Trade Performance: “Bounced back after a long holiday Lebaran”


       Exports in June 2017 fell to US$ 11.64 bn (down by 18.82% m-o-m). Meanwhile imports in June 2017 also decreased to US$ 10.01 bn (down by 27.26% m-o-m). The falling of exports and imports was caused by seasonal factors namely the long holiday Lebaran which impact on the reduced working days resulting in decrease in loading and unloading activities in the ports. Furthermore, the monthly decreased in exports due to the fall in the export of oil & gas, CPO, coal, rubber & the articles there of, vehicles & parts, and machinery/mechanical appliance. The fall in the month-on-month imports mainly due to the decrease in the import of oil & gas, machinery/mechanical appliance, machinery/electrical appliance, plastics & the articles there of, iron & steel, and organic chemical. On a yearly basis, exports fell by 11.82% y-o-y in June 2017, while imports also decreased by 17.21% y-o-y. The fell in the year-on-year exports indicates demand for Indonesia's exports in June 2017 was lower than in June 2016. The decreased in the year-on-year imports suggests relatively weakening domestic activity in June 2017, compare than in June 2016.


       We expect Indonesia’s exports to bounce back in July 2017. This is due to the normal return of trading activity after the long holiday of Lebaran in the previous month. Furthermore, in line with the improving economy of Indonesia's major trading partners will have an impact of rising demand from these countries, which in turn make Indonesia’s exports increased.  In addition, along with the increase in commodity prices such as crude oil, coal, and metal also impacted the rise of Indonesia's export performance. We expect Indonesia’s exports will increase to US$ 13.27 billion in July 2017 compared with US$ 11.64 billion in previous month.


       Meanwhile, we also expect Indonesia’s imports rise in July 2017. The increase was also driven by the normal return of trading activity after the long holiday of Lebaran in the previous month. Furthermore, the rise in imports is also caused by the improving domestic economy activities in July 2017. We expect Indonesia’s imports may increase to US$ 11.90 billion in July 2017 compared with US$ 10.01 billion in the previous month. Consequently, Indonesia’s trade balance is expected to surplus US$ 1.37 billion in July 2017, narrowing compare than a surplus US$ 1.63 billion in one month earlier.

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