Trade Balance of Indonesia: Despite Declining Non-Oil and Gas Exports, the Trade Surplus Persists
Indonesia collected a USD $2.01 billion trade surplus in January 2024, which is the smallest surplus in six months (July 2023) for Southeast Asia’s largest economy. Key reason is that Indonesia’s non-oil and gas exports showed a relatively steep decline compared to non-oil and gas exports in the preceding month and in the same month one year earlier. So, Indonesia’s export performance remains under some pressure.
As usual, before we delve deeper into Indonesia’s latest export and import statistics, we first take a look at the international trade environment.
International Trade
The United Nations Conference on Trade and Development (or UNCTAD) released a publication on 22 February 2024 in which it highlighted that “key shipping routes in the Red Sea, Black Sea and Panama Canal are simultaneously under threat, with far-reaching implications for inflation, and food and energy security”. UNCTAD refers to the recent attacks on commercial vessels in the Red Sea that as a consequence affect shipping through the Suez Canal. Ever since November 2023, Yemen's Iran-aligned Houthis launched drone and missile attacks in the Red Sea in support of Palestinians as the Israel-Hamas war continues. These actions have attracted retaliatory strikes by the US-British coalition but, so far, these have failed to stop the Houthis’ actions.
The Suez Canal is a vital lane for seaborne trade as this trade shortcut accounts for around 12 percent of global maritime traffic. Ongoing aggression forces firms to take the longer, more expensive route around Africa. According to an UNCTAD estimate, transits passing the Suez Canal decreased by 42 percent compared to its peak. With major players in the shipping industry temporarily suspending Suez transits, weekly container ship transits have fallen by 67 percent, while container carrying capacity, tanker transits, and gas carriers have experienced significant declines too.
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