Trade Performance: “Driven by Seasonal Factor”
Exports in February 2018 fell to US$ 14.10 bn (down by 3.14% m-o-m). Meanwhile imports in February 2018 also decreased to US$ 14.21 bn (down by 7.16% m-o-m). The falling of trade was caused by the decrease of working days in February which resulted in decreasing activity of goods loading at the port. Furthermore, the monthly decreased in exports in February 2018 due to the fall in the export of coal, machinery/electrical appliance, foot wear, non-knitted apparel, and iron/steel. The fall in the month-on-month imports mainly due to the decrease in the import of machinery/mechanical appliance, machinery/electrical appliance, iron/steel, plastics & the articles there of, and weapons / ammunition. On a yearly basis, exports still rose by 10.13% y-o-y in February 2018, while imports also increased by 26.58% y-o-y. The rise in the year-on-year exports indicates demand for Indonesia's exports in February 2018 was higher than in February 2017. The increased in the year-on-year imports suggests relatively improving domestic activity in February 2018, compare than in February 2017.
We expect the Indonesia’s exports increase in March 2018. The increase in exports was mainly due to seasonal factors such as a rise in working days in March compared to the previous month which resulted in increased loading and unloading activities at the port. 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. On the other hand, the increase in Indonesia’s exports is constrained by barriers to exports of palm oil to Europe and export barriers to the US. We expect Indonesia’s exports will increased to US$ 14.83 billion in March 2018 compared with US$ 14.10 billion in previous month.
In the meantime, we also expect Indonesia’s imports rise in March 2018. The increase in imports was mainly due to seasonal factors, namely the rise in working days in March compared to the previous month which resulted in increased loading and unloading activities at the port. Furthermore, the rise in imports is also in line with the increase in domestic economic activity. In addition, the government also decided to increase the import of foodstuffs such as rice, salt, chili, onion, garlic, etc. for stabilization of domestic food prices. We expect Indonesia’s imports may increase to US$ 15.04 billion in March 2018 compared with US$ 14.21 billion in the previous month. Consequently, Indonesia’s trade balance is expected to deficit US$ 0.21 billion in March 2018, widening compare than a deficit US$ 0.12 billion in one month earlier.
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