Indonesia’s trade surplus increased markedly at the start of the year, as exports grew more rapidly than imports, figures from Statistics Indonesia showed on Wednesday.
The trade surplus rose to $3.87 billion in January from $0.96 billion in the same month last year.
Economists had expected a surplus of $3.35 billion. In December, the trade surplus was $3.96 billion.
Exports logged a double-digit annual growth of 16.37 percent yearly in January, much faster than the 6.58 percent gain in the prior month. The expected growth rate was 12.5 percent.
Further, this was the fastest rate of growth since September 2022, when exports had risen 20.17 percent.
On a monthly basis, exports were 6.36 percent lower in January, and imports slipped 7.15 percent.
Read more: Indonesia Logs Fastest Growth In 9 Years
Non-oil and gas exports alone grew 13.97 percent annually in January, while they fell 6.84 percent from a month ago due to lower foreign demand for mineral fuel commodities.
At the same time, the largest monthly increase occurred in precious metals and jewelry, or gems.
Indonesia’s main non-oil and gas export destination in January was China, followed by the United States.
Imports climbed only 1.27 percent from last year versus an expected increase of 1.5 percent.
“We expect that trade surpluses this year will be robust but nowhere close to the record high of $7.5bn in April of last year,” Nicholas Mapa, a senior economist at ING Economics, said.
“Thus, we can assume that the Indonesian rupiah will see less and less support from the current account in 2023.”
Indonesia is reportedly planning rules to prompt certain exporters to keep a portion of export earnings onshore in a bid to help boost the domestic supply of foreign currency.
Uncertainty regarding the measure and the possibility of this regulation being pulled abruptly may result in episodes of volatility for the currency, especially if some market participants view this as a form of capital control, the economist said.
“The IDR may be facing diminished support from the trade and current account surpluses this year but the currency could be steadied by renewed foreign investor flows should sentiment towards emerging markets improve substantially in the coming months,” Mapa added.
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