Indonesia’s Trade Balance in March Successfully Records a Surplus

Indonesia's trade balance

Several international events occurred recently have affected the world economy. However, there are positive things Indonesia gets. Most recently, Indonesia’s trade balance is projected to still record a high surplus in March 2022.

This was conveyed by Bank Mandiri economist Faisal Rachman, who estimated that Indonesia’s trade balance would record a surplus of US$ 2.89 billion in March 2022.

Faisal estimates that export performance in March 2022 will remain solid with a growth of 26.33 percent year-on-year (YoY).

“The increase in global commodity prices during the Russia-Ukraine war remains the main driver of a large surplus because it boosts Indonesia’s export performance,” he said, Wednesday (13/4/2022).

On a monthly basis, Indonesia’s export performance is projected to grow by 13.31 percent (month-to-month/mtm). Export performance, he said, was largely driven by the surge in coal and CPO prices.

However, he estimates there is a risk of lower global trade volumes as many trading partners are currently facing challenges against rising inflation.

Furthermore, China’s manufacturing activity weakened as the manufacturing PMI fell to 48.1, the lowest since February 2020 amid measures to contain the spread of Covid-19.

Meanwhile, he estimates that Indonesia’s imports in March 2022 will grow by 20.90 percent yoy or 21.98 percent on a monthly basis.

“This is mainly due to improving domestic demand, consistent manufacturing PMI in the expansion zone, rising oil prices, and seasonal factors in higher demand during preparations for Ramadan and Lebaran,” said Faisal.

On the other hand, LPEM FEB UI Macroeconomic and Financial Market Economist Teuku Riefky estimate that the trade balance surplus in March 2022 was US$ 3.95 billion, or higher than the surplus in February 2022 which was US$ 3.83 billion.

“Indeed, there is still an increase, but the increase is not as big as in the previous month. In other words, the increase in the trade balance surplus will slow down,” said Riefky as quoted from Kontan, Tuesday (12/4).

Riefky said the trade balance surplus trend would still occur. However, in April 2022 it is expected to decrease, in line with the improving performance of imports due to further economic recovery.

However, Riefky appealed to Indonesia to continue to prepare the horses to strengthen the performance of domestic exports. One of them is through domestic downstream and structural reforms as well as improving the quality of exports so that they do not depend on traditional commodities.