Indonesia: Trade numbers ahead of expectations as economy shows signs of recovery

Trade figures for February moved well past market consensus, with exports surging 30.5% while imports increased sharply, by 25.7%. The substantial pickup in exports was helped along by higher commodity prices, while also benefiting from improving global trade conditions with some countries rolling out their vaccination efforts. Meanwhile, imports saw another month of expansion, boosted by base effects but also reflecting signs of improving domestic economic conditions asIndonesia pushes its own inoculation rollout. Higher imports were likely also driven by a pickup in vehicle sales reported earlier, with March posting a 28.2% increase after Bank Indonesia (BI) relaxed borrowing conditions to help spur sales.

Despite the extreme movements for both imports and exports in terms of growth, the trade balance was right at market expectations, resulting in a $1.56 bn surplus at the end of March. Indonesia’s trade surplus should help support the IDR, which has come under significant pressure in recent weeks due to financial market-related outflows. We expect Indonesia to continue to post a trade surplus in the coming months as exports will likely increase as global trade improves, which will partially offset depreciation pressure in the near term.