Indonesia Macro Update - Trade Balance 15 Jan 2025
KBVS MACRO UPDATE
Wednesday, 15 January 2025
Trade Surplus Continues, but CAD Expected to Persist
Indonesia's trade surplus narrowed to USD2.24 bn in Dec ’24. The primary drivers behind the export decline were a significant drop in nickel and nickel-related products (HS75) by -20.48% MoM and machinery and mechanical appliances (HS84) by -26.38% MoM. On the import side, the primary contributors to the increase were crude oil imports, which surged by 82.69% MoM, and mineral fuel imports (HS27), which rose by 33.45% MoM.
Despite a quarterly trade surplus of USD9.18 bn in 4Q24, concerns remain over the persistent current account deficit (CAD), which has been ongoing since 2Q23. The continued CAD raises concerns about Rupiah volatility. Despite the 25 bps BI rate cut implemented today, we hope that Bank Indonesia will adopt a more inward-looking approach by encouraging a reduction in domestic funding costs, boosting credit absorption, and driving economic growth within the country
Regards,
KBVS Research Team