Indonesia’s Trade Surplus Larger Than Forecast as Imports Slump

(Bloomberg) -- Indonesia registered a far larger trade surplus than forecast in May, as a 42% decline in imports outweighed a larger-than-expected drop in exports.

The trade surplus was $2.1 billion, the statistics office said Monday, compared to the $629 million surplus forecast in a Bloomberg survey of economists. Imports fell for an 11th straight month, underscoring concerns about the health of an economy that relies heavily on consumer spending.

Key Insights

• The drop in imports exceeded the median estimate of a 25% decline. Imports of consumer goods fell 39.8%, while incoming shipments of raw materials dropped 43% and capital goods by 40%
• Exports fell 29% from a year ago, worse than the 19.6% decline survey forecast. That was mainly driven by oil and gas, with shipments down 42.6% from a year earlier, and manufacturing, which was down 25.9%. Agricultural exports fell 25.5%
• Partial lockdowns to curb the virus have hurt demand and economic growth. The government now expects gross domestic product to grow 2.3% this year, down from a previous forecast of 5.3%, and has warned it even could contract by 0.4% in a worst-case scenario
• The trade data may put further pressure on Bank Indonesia to lower borrowing costs to support growth. The central bank will announce its rate decision Thursday after leaving rates unchanged in April and May

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• The trade surplus for the first five months of the year stood at $4.3 billion
• To see a breakdown of the trade figures, click here

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