Indonesia Macro Update - Trade Balance 19 Jun 2024
KBVS MACRO UPDATE
Wednesday, 19 June 2024
Sustained Trade Surplus Reduces Risks of Current Account Deficit and Rupiah Depreciation
The sustained trade surplus in May '24, amounting to USD2.93 bn (Prev: USD2.72 bn - revised), marks the continuation of 49 consecutive months of trade surplus since Apr ’20. This figure also represents a significant increase of trade surplus compared to May ’23, which only reached USD0.43 bn. In May ’24, exports increased by 13.82% MoM and on the import side, there was a 14.82% MoM increase.
Concurrently, with the expectation of (1) continued expansion in China's PMI, and (2) imports being used as components for re-exports, we anticipate the trade surplus in Jun ’24 to increase. Meanwhile, with (3) the trend of declining external debt, we also expect to further reduce the current account deficit. Furthermore, we expect this to facilitate an appreciation of the Rupiah and maintain the BI rate at 6.25% through the end of 2Q24.
Regards,
Fikri C Permana - KBVS Research