Indonesia posted another trade surplus at the end of April 2023 despite steep drops in both exports and imports amidst declining commodity prices. 

Indonesia exports in April 2023 dropped 29.4% by value compared to the same month in the previous year, or 17.62% compared to the previous month, to US$19.29 billion, according to data from the Indonesian Statistics Agency. Imports also fell by 22.32% compared to April 2022, or 25.45% compared to March 2022, to $15.25 billion.  

This translates to a trade surplus of $3.94 billion, just above a recent Reuter’s poll estimate of $3.38 billion, though the poll also gave lower estimates for both the drop in exports (18.55%) and imports (7.85%). The surplus also came as a surprise to US-based Moody’s analytics, which had earlier predicted a steeper decline. 

Indonesia is a major commodity exporter, being the world’s largest supplier of palm oil, its largest coal exporter by tonnage, as well as the largest producer of nickel. The country’s economy also relies on several other commodities such as tin and rubber. However, commodities have seen their share in GDP contribution decline in comparison to the manufacturing sector which has been gradually rising in the past couple of decades. 

The decline in trade continues the trend that has been seen since February, with analysts warning that declining commodity prices would mean that Indonesia’s trade surplus may continue to shrink and may even result in a weaker economic growth compared to last year. 

Indonesia-based Bank Permata’s chief economist Josua Pardede, as quoted by The Jakarta Post, said the continued economic slowdown in China and the US would hit Indonesia’s export performance and likely narrows the trade surplus even further, which could also result in lower GDP this year. 

Meanwhile, Fakhrul Fulvian, an economist at Jakarta-based Trimegah Securities, said the data might spur Indonesia’s central bank to ease monetary policy. 

“I expect Bank Indonesia would start making dovish comments and eventually start cutting rates in August or September this year,” Fakhrul said, as quoted by Reuters.