Indonesia’s trade surplus unexpectedly widened in April as imports posted a larger than expected contraction. The trade surplus of USD670m over April is higher than March's USD497mn surplus and significantly higher than the consensus expectation for the surplus to narrow to USD100m.
Both imports and exports continued to post significant year-over contractions. Indonesia’s exports fell by 12.65% y/y in April, compared to a 13.51% y/y fall in March, missing expectations for an improvement to -10.85%. Imports fell by -14.62% y/y, compared to a -10.41% y/y fall in March and a consensus expectation for a -9.15% fall.
Details of the report showed that the recent increase in oil prices has had a larger impact on imports than it has on exports. Looking forward, the timing and implementation on public works and infrastructure programs is more likely to emerge as a significant determinant of import growth.
“Recent encouraging signs of greater co-ordination between key government policy agencies and departments suggest that the value-added component of the imports basket is likely to increase as key public-works and infrastructure programs are accelerated. We would expect Indonesia’s trade surplus and current account to soften correspondingly.” notes ANZ in a report.
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