Indonesia has posted its biggest trade surplus in nine years in July, reporting a $3.26 billion surplus.
Exports grew 14.33% from June, while domestic demand for imports remained subdued amid the COVID-19 pandemic, showing an overall plunge of 32.55% year over year. Exports, however, still remained 9.9% below the value of shipments in the same month last year.
By value, exports were the highest since March. Statistics bureau chief Suhariyanto attributed this to sales of agricultural products like palm oil, herbs and birds nests, and despite weaker exports of coal, rubber and oil and gas.
The data indicates the potential for a further narrowing of the current account deficit for the rest of the year, even after it significantly narrowed in the first half due to the pandemic.
Central bank data earlier on Tuesday showed Indonesia’s current account gap in April-June was equal to 1.2% of GDP, less than half the deficit in the same period in 2019.
Bank Danamon’s economist, Wisnu Wardana, said despite the trade data the central bank may need to consider a number of other indicators before utilising “a limited room of monetary easing”, such as inflation and the rupiah’s movement.
Bank Indonesia (BI) is due to wrap up a two-day policy review on Wednesday. The majority of economists in a Reuters poll, including Wardana, expects the benchmark rate to remain unchanged after four cuts to support the economy.