Indonesia’s trade surplus in April is predicted to have risen from the previous month, with softer imports due to reduced production activities during the Ramadan holiday, according to a poll by Reuters.
The median analysis from the poll, which involved 14 economists, indicated an expected increase in the trade surplus to $3.38 billion in April from $2.91 billion in March. As the largest economy in Southeast Asia, Indonesia has been registering monthly trade surpluses since mid-2020. However, economists have warned that this trend is likely to abate this year as certain commodity prices drop in response to weakening global demand.
The poll also forecasted a drop in April exports by 18.55% on a year-on-year basis, largely due to the high base effects. This is a greater contraction from the 11.33% decrease witnessed in the previous month. Imports for April were predicted to decline by 7.85% from the same month last year, a marginally larger contraction than the 6.26% fall recorded in March.
According to Faisal Rachman, an economist at Bank Mandiri, the moderation in commodity prices is not the sole factor contributing to the anticipated fall in exports for April. The reduction in working days compared to the same month last year, due to the later occurrence of the Ramadan holiday in May, also played a part.
Rachman, who projected a $3.25 billion surplus for April, anticipates that the trade surplus will continue to shrink in the future as exports are expected to ease further. However, he suggests the surplus might last longer than initially thought. “The trade surplus could last longer than anticipated as the decline in commodity prices will be more gradual because of China’s economic reopening and OPEC+ oil production cut,” said Rachman, referring to the Organization of the Petroleum Exporting Countries, Russia, and their allies.
These findings reflect the dynamic and interconnected nature of global economics, demonstrating how shifts in international markets as well as local events can significantly influence a country’s trade balance.