Indonesian exports are expected to rise 6.7 percent to IDR 1,399.7 trillion (USD $123.9 billion) in 2014 as a number of advanced markets (including the United States) have been showing signs of improving economies (the calculation of the figures was done by the Ministry of National Development Planning also known as Bappenas). Increased demand from these advanced markets will result in more exports of Indonesian manufactured products. Indonesian exports of natural resources, on the contrary, are expected to slow.

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After announcing the low March inflation rate (0.08 percent), Statistics Indonesia (BPS) also released positive news about Indonesia's trade balance. In February 2014, Indonesia recorded a USD $785.3 million trade surplus, supported by a USD $1.58 billion surplus in the non-oil and gas sector (the oil and gas sector recorded a deficit of USD $797.4 million). According to BPS Head Suryamin, exports in February rose 0.68 percent (month-to-month) to USD $14.57 billion, while imports declined 7.58 percent (mtm) to USD $13.78 billion.

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The Indonesian government has revised its export target for fishery products in 2014 to USD $5.1 billion from USD $5.65 billion. This downward revision has been decided because several export markets, including the United States and Europe, still experience difficulties on their path towards economic recovery, thereby reducing demand for Indonesian fishery products. Although revised, the new target is still much higher than export realization in 2013 when USD $4.2 billion worth of fishery products were exported from Indonesia.

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Agus Martowardojo, Governor of the central bank of Indonesia (Bank Indonesia) expects a trade surplus of around USD $700 million in February 2014. If Martowardojo's forecast is realized, it would be a sharp contrast to the USD $430.6 million trade deficit that was recorded one month earlier. In January, the trade deficit was mainly due to declining exports of coal and vegetable oil (which together account for 26.7 percent of total non-oil & gas exports), among others, due to ongoing annual contractual negotiations at the year-start.

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Tomorrow (13/03), Bank Indonesia will hold its next Board of Governor's Meeting to discuss general policies in the monetary field. As usual, market participants are highly interested in the central bank's assessment of the country's economic fundamentals and interest rates policy. However, predictions about Bank Indonesia's stance toward its benchmark interest rate (BI rate) are mixed. Some expect it to be kept at 7.50 percent as inflation has been under control. Others anticipate a 0.25 percent hike due to the country's weak exports.

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After recording three months of consecutive trade surpluses at the end of 2013, Indonesia's trade balance slipped back into deficit in January 2014. Indonesia - Southeast Asia's largest economy - posted a USD $430.6 million deficit in the first month of 2014. Exports fell 5.79 percent (year-on-year) to USD $14.48 billion, while imports fell 3.46 percent to USD $14.92 billion. The decline in exports were caused by the implementation of the ban on raw minerals (per 12 January 2014). Mineral ore exports fell over 70 percent (month-to-month).

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Ahead of the G20 meeting of finance ministers and central bank governors in Sydney on 22 and 23 February 2014, the International Monetary Fund (IMF) released a report titled "Global Prospects and Policy Challenges", which discusses recent global economic developments as well as an outlook for the near future. According to the report, global economic activity picked up in the second half of 2013, largely due to improved conditions in advanced economies, thus boosting exports in many emerging markets.

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Amid an improving trade balance, Indonesia’s foreign exchange reserves rose to USD $100.7 billion at the end of January 2014, according to a press release of Indonesia's central bank (Bank Indonesia). Compared to December 2013, the reserves increased USD $1.3 billion. These reserves are sufficient to finance 5.7 months of imports or 5.6 months of imports and servicing of government external debt, which is well above the international standard of reserve adequacy at 3 months of imports.

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The central bank of Indonesia (Bank Indonesia) stated that economic growth during the fourth quarter of 2013 was recorded at 5.72 percent (yoy), thus having increased compared to the previous quarter (5.63 percent, yoy), and which is also higher than Bank Indonesia's estimate (5.7 percent). With this development, the overall economic expansion in 2013 reached 5.78 percent. Bank Indonesia considers that the fundamental condition of Indonesia’s economy is still relatively robust.

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Market participants were pleased to see the trade balance of Indonesia posting an unexpected USD $1.52 billion surplus in December 2013, almost twice as high than previous forecasts. This December surplus is the highest monthly surplus since December 2011. Exports rose 6.56 percent from November 2013 and 10.33 percent from December 2012, while imports rose 2.04 percent from November 2013 but declined 0.79 percent from December 2012. Although showing an easing trend, Indonesia posted a trade deficit of USD $4.06 billion in full 2013.

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In line with estimates, Indonesia’s trade balance showed another deficit in January 2020. Based on the latest data from Statistics Indonesia (Badan Pusat Statistik, or BPS), a USD $864.2 million trade deficit was recorded in the first month of the year.

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While many are relieved to see a trade surplus for Indonesia in August 2019, the picture does not look too positive when we delve a bit deeper in the data, and shows that global conditions are far from positive amid contracting international trade and subdued global economic growth (with ongoing tariff tensions between the United States and China being a key issue).

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After nearly nine years of talks and negotiations (although communication between both sides had been put to a halt - amid diplomatic tensions – at more than one occasion over these nine years) Indonesia and Australia finally signed the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) in Jakarta on 4 March 2019. It is an agreement that launches a brand new chapter in economic relations and cooperation between Australia and Indonesia.

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Based on the latest data from Indonesia’s Statistical Agency (BPS), Indonesia recorded a USD $227.1 million trade surplus in September 2018. Although it is a very small surplus, it did lead to some optimism. After all, Indonesia had recorded big monthly trade deficits of USD $2.0 billion and USD $944.2 million in July 2018 and August 2018, respectively.

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Based on the latest data of Indonesia’s Statistics Agency (BPS), Indonesia’s trade deficit was recorded at USD $1.02 billion in August 2018. Although improving from the USD $2.03 billion trade deficit one month earlier (which constituted Indonesia’s biggest monthly trade deficit in five years), the deficit remains robust and therefore causes persistent concerns about the country’s current account deficit and the rupiah exchange rate.

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The trade balance of Indonesia showed another deficit in February 2018, the nation's third consecutive monthly trade deficit. Based on data from Indonesia's Statistics Agency (BPS), the country's total exports reached USD $14.1 billion in February, up 10.1 percent on a year-on-year (y/y) basis, while total imports grew 25.2 percent (y/y) to USD $14.2 billion.

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The central bank of Indonesia (Bank Indonesia) said it expects to see another monthly trade deficit - approximately USD $230 million - in February 2018. If so, it would be the third straight monthly trade deficit for Southeast Asia's largest economy after a USD $220 million deficit in December 2017 and a USD $678 million deficit in January 2018 (the latter being the country's highest monthly deficit since April 2014).

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In line with the increase in domestic economic activity, Indonesia's trade balance recorded a USD $678 million deficit in January 2018. The deficit was particularly attributed to a shrinking surplus of the country's non-oil & gas trade balance. Although Indonesia's oil & gas deficit declined in the first month of 2018, it was not enough to offset the impact of the shrinking non-oil & gas surplus. Hence the country posted its second consecutive monthly trade deficit.

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Through Trade Ministry Regulation No. 82/2017 on the Terms of Use of National Shipping and Insurance Companies for the Export and Import of Certain Goods the Indonesian government requires exporters of crude palm oil (CPO), coal and rice to use ships that are owned by local sea transport companies as well as to use domestic insurance. This regulation will come into effect, gradually, per May 2018.

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In the last month of 2017 Indonesia posted a USD $270 million trade deficit according to the latest data from Statistics Indonesia (BPS). This result goes against the prediction of most analysts, who expected to see another trade surplus for Southeast Asia's largest economy. Indonesia posted a trade surplus in all months of 2017 with the exception of July and December.

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