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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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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The central bank of Indonesia (Bank Indonesia) lowered its forecast for growth of Southeast Asia's largest economy in 2014 from the range of 5.8 - 6.2 percent to 5.5 - 5.9 percent as expansion of domestic consumption and exports are less robust than previously estimated. As such, Bank Indonesia implied that economic expansion of Indonesia will slow down further. Starting from 2011, gross domestic product (GDP) growth of Indonesia has declined steadily from 6.5 percent to 5.8 percent in 2013.

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It was decided at the Board of Governors' Meeting (on 13 March 2014) to hold the benchmark interest rate (BI rate) at 7.50 percent, the lending facility rate at 7.50 percent and the deposit facility rate at 5.75 percent. The policy is consistent with ongoing efforts to guide inflation back towards its target corridor of 4.5±1 percent in 2014 and 4.0±1 percent in 2015, as well as to reduce the current account deficit to a more sustainable level. Recent developments indicate that the rate of inflation is under control and the current account deficit is shrinking.

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Amid a political crisis in the Ukraine, the oil price has risen significantly and the US dollar is appreciating against other currencies, particularly emerging market currencies, including the Indonesian rupiah exchange rate. Besides the US dollar, demand for other safe havens (gold, yen as well as US Treasuries) also increased due to Russian presence in the Ukraine (Crimea peninsula). Based on the Bloomberg Dollar Index, the rupiah had depreciated 0.35 percent to IDR 11,632 per US Dollar at 11:40 a.m. local Jakarta time.

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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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Inefficiencies at the Tanjung Priok port, Indonesia's main port (located in the heart of Jakarta) and which handles about two-thirds of the country's international trade, are a major cause for logistics costs in the domestic economy. Indonesia's logistics costs account for about 24 percent of GDP, thus significantly higher compared to its regional peers. The long dwell time at Tanjung Priok is one of the largest concerns, particularly as trade flows continue to grow. The average import container dwell time increased from 4.8 days in 2010 to 6.4 days in 2013.

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Indonesia's President Susilo Bambang Yudhoyono will officially appoint Muhammad Lutfi as the new Trade Minister on Friday (14/02), thus replacing Gita Wirjawan who requested to step down as Trade Minister on 31 January 2014 in order to focus solely on his presidential bid. Muhammad Lutfi will only have eight months time to head the Trade Ministry because a new Indonesian government will be inaugurated in October (legislative and presidential elections are scheduled for April and July 2014).

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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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The central bank of Indonesia (Bank Indonesia) expects that the country will record another monthly trade surplus in December 2013. Perry Warjiyo, Deputy Governor of Bank Indonesia, said that the December trade balance is estimated to record a USD $785 million surplus, thus slightly improving from the USD $776.8 million surplus in November 2013. If Bank Indonesia's forecast is realized then it would be the third consecutive month in which Indonesia posts a trade surplus. This is important  to improve the country's financial stability.

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In the April 2018 edition of its East Asia and Pacific Economic Update, the World Bank is cautiously optimistic about economic growth in developing East Asia and Pacific (EAP). After a better-than-expected global economy in 2017, growth in developing EAP is expected to remain stable in 2018, reflected by solid prospects in Thailand and several commodity exporters, notably Indonesia. Domestic demand is estimated to remain robust in most of the region's economies and continue to underpin growth in 2018 and beyond. However, with economies operating close to their potential, price pressures are expected to rise.

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Indonesian President Joko Widodo and Australian Prime Minister Malcolm Turnbull have intensely discussed negotiations surrounding the creation of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). Both leaders met at the sidelines of a special summit of the Association of Southeast Asian Nations (ASEAN) leaders in Sydney (Australia) this weekend.

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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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Earlier this week, the central banks of Indonesia (Bank Indonesia), Malaysia (Bank Negara Malaysia), Thailand (Bank of Thailand) jointly announced the launch of the local currency settlement framework. This framework aims at boosting the use of local currencies in transactions (specifically related to trade and investment) conducted between Indonesia, Malaysia and Thailand in an effort to reduce these countries' dependence on the US dollar.

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The trade surplus of Indonesia widened in September 2017 as export growth outpaced import growth. Indonesia's Statistics Agency (BPS) announced on Monday (16/10) that the nation's trade balance showed a USD $1.76 billion surplus in September, higher than analysts' forecasts and slightly higher than the USD $1.72 billion surplus in the preceding month.

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In its latest report, the World Bank stated that Indonesia's macroeconomic fundamentals are solid and have been strengthening amid the central government's eagerness to implement critical structural reforms, while investment growth rose to the highest levels since the last quarter of 2015 (mainly investment in buildings and structures).

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