Indonesia Macro Update - Trade Balance 15 Dec 2023
KBVS TRADE BALANCE UPDATE
Friday, 15 December 2023
Trade Surplus in Nov '23 Declines, Adding Risks of 4Q23 Current Account Deficit
Trade surplus declined sharply to just USD2.41 bn (Cons: USD2.97 bn, KBVS: USD4.95 bn, Prev: USD3.48 bn), marking the lowest value since Jul '23. This decline was fueled by a notable +4.89% MoM or +3.29% YoY surge in imports, reaching USD19.59 bn during Nov '23. Meanwhile, exports continued facing pressure, declining by -0.67% MoM or -8.56% YoY.
Looking ahead, we anticipate a potential relief from export price pressures due to the expected global decrease in policy rates, aiding in reducing the substantial cost of funds and fostering global Manufacturing PMI recovery. We aspire for an improved trade surplus in Dec '23, aiming for a 4Q23 surplus to exceed USD10.0 bn. The goal is to reduce the risk of a current account deficit witnessed in the last two quarters, thereby reducing the twin deficits risk, a major challenge to Rupiah stability. Additionally, the anticipated improvement in the fiscal deficit by the end of 2023, standing at only 1.0% of GDP (compared to the APBN target of 2.84% of GDP), could further support this effort.
Regards,
Fikri C Permana - KBVS Research Team