POLL-Indonesia trade surplus seen widening in Feb

March 12, 2021, 08.50 PM | Source: Reuters
POLL-Indonesia trade surplus seen widening in Feb

ILUSTRASI. trade balance


MACROECONOMICS - ​JAKARTA. Indonesia's trade surplus likely widened in February from a month earlier on the back of higher commodity prices, which would be a 10th straight monthly surplus for Southeast Asia's largest economy, according to a Reuters poll on Friday.

The median forecast of 12 economists in the poll was for the resource-rich country to record a $2.21 billion trade surplus in February, up from $1.96 billion in January.

The poll predicted export growth slowed to 8.73% annually last month from 12.24% in January, which Bank Mandiri analyst Faisal Rachman attributed to slowing demand in China balancing out higher prices of the country's main commodities such as palm oil and coal.

Meanwhile, imports likely grew 12.60% on-year, their first growth since June 2019 and followed January's 6.49% decline, due to a low base effect, the poll showed.

The February trade data will be released on Monday, days before Bank Indonesia meets to review monetary policy

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Indonesia's monthly trade surpluses, which came from stronger export recovery from the impact of the coronavirus pandemic amid weak import demand, have helped the country narrow its current account deficit.

This gave room for the central bank to cut rates by 150 basis points during the pandemic.

"In 2H21, import will start to catch up as economic growth accelerates driven by strengthening domestic consumption and considerably increasing fixed capital investment activities," Faisal of Bank Mandiri said.

"Higher investment activities will lead to higher import growth of raw materials and capital goods."

 

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