Indonesia's December exports beat forecast, 2020 trade surplus highest in 9 years

TRADE BALANCE - JAKARTA. Indonesia's exports and imports beat forecasts in December, helping Southeast Asia's largest economy book its biggest annual trade surplus since 2011, data from the statistics bureau showed on Friday.

Indonesia's exports have rebounded faster than imports from the COVID-19 pandemic, supported by economic recovery in its biggest trade partner China, while imports remained mostly subdued throughout the year with weak domestic activity.

December exports surged 14.63% on a yearly basis, the strongest since July 2018, to a seven-year high of $16.54 billion, on higher prices of the country's top commodities such as palm oil. A Reuters poll had predicted a 6.3% rise.

Imports fell 0.47% annually to $14.44 billion, much slower than the poll's 12.47% decline forecast, and also the slowest since Indonesia began reporting negative growth every month for imports in July 2019.

The trade surplus in December was $2.1 billion, taking the year's total to $21.74 billion - the biggest since the height of the commodity boom in 2011. However, the December surplus was slightly below the $2.3 billion expected in the poll.

Asked whether the momentum for trade recovery could continue, the statistics bureau chief Suhariyanto said fresh coronavirus lockdowns could affect shipments, although the roll out of vaccines would be positive for trade.

Faisal Rachman, an economist with Bank Mandiri, said he was more surprised by the upshot of imports rather than exports, which was already in line with the rise in commodity prices.

"If we look at imports of non-oil and gas, the biggest increases were in mechanical and electrical machinery. This means there is a sign of recovery in investment and that is good news for the fourth-quarter (economic) growth," he said.