JAKARTA -- Economists consider Indonesia's trade surplus in October 2023 not a good news. In fact, there are things to watch out for from Indonesia's export-import performance data last month, one of which is the downward trend in raw material imports.
Bhima Yudhistira, director of the Center of Economic and Law Studies (Celios), said the surplus was illusory. “The surpluses seem to be that when checked exports fell sharply, imports also fell. So this surplus model is far from a quality word,” Bhima told Republika on Wednesday (15/11/2023).
He said that Indonesia's exports in that period fell because they relied too much on traditional markets. In addition, Bhima said Indonesia also still relies on primary processed commodities, making exports look down as well. “It is true that we are downstream, but it is actually only half-finished, which has a small added value,” Bhima said.
Development of the trade balance - (BPS)
In addition, Bhima said, Indonesia is still only relying heavily on traditional markets such as China in the next five years. Meanwhile, Bhima said China's economic rebalancing was also hurting Indonesia's export demand.
He added that falling imported raw materials were also a warning because it reflected manufacturing industries other than nickel processing were slowing down. “Food and beverage manufacturers are starting to lay off employees. That's a sign of bad luck,” Bhima said.
BPS Deputy Statistics for Distribution and Services Pudji Ismartini on Wednesday (15/11/2023) said that the trade balance in October 2023 had a surplus of 3.48 billion US dollars or rose by 0.07 billion US dollars on a monthly basis. However, the surplus value was lower than in the same month last year.
The value of Indonesia's exports in October 2023 reached 22.15 billion US dollars, up 6.76 percent compared to September 2023 exports of 20.75 billion US dollars. However, the value of these exports decreased by 10.43 percent compared to the achieved in October 2022 (yoy).
Meanwhile, the value of Indonesia's imports in October 2023 reached 18.67 billion U.S. dollars or up 7.68 percent compared to the import value in September 2023 of 17.34 billion U.S. dollars.
When compared to October 2022, the value of imports in October 2023 decreased by 2.42 percent.
According to the category of use of goods, the value of imports January-October 2023 compared to the same period of the previous year increased in the capital goods group worth 2,749.3 million US dollars (9.32 percent) and consumer goods 1,138.6 million US dollars (6.96 percent). Meanwhile, imports of raw materials/helpers fell by 19,317.3 million U.S. dollars
(12.65 percent). Trend of decreasing import value of raw materials. - (BPS)
Mohammad Faisal, Executive Director of Indonesia's Center of Reform on Economics (CORE), said Indonesia's trade surplus was unhealthy.
“So the result of the release of the BPS for trade in October 2023 is still continuing the trend of surplus like my estimate of around three billion US dollars but continuing the trend of a less healthy surplus,” Faisal said.
He explained that this is because the surplus of the trade balance is due to a decrease in exports, not because of an increase. Faisal confirmed that Indonesia's exports in the period decreased.
Although on a monthly basis the surplus of the trade balance has increased, on an annual basis it has decreased. “This means that compared to the same month last year, both exports and imports continue to contract. Surplus yes because the decline in imports is sharper than exports,” Faisal explained.
He said that it is necessary to be careful also with regard to the fact that there is a consistently downward trend in imports of auxiliary raw materials. Faisal said it indicated reduced industrial demand for raw materials.
Faisal said it had to do with the level of production in the manufacturing industry. “Reduced production levels often correlate with downstream demand levels. It also illustrates the domestic demand side,” Faisal said.
Bank Indonesia Communications Department Executive Director Erwin Haryono said the continued trade surplus was a positive development to support the external resilience of the Indonesian economy. He assured that Bank Indonesia will continue to strengthen policy synergies with governments and other authorities. “It is being done to continue to enhance external resilience and support the national economic recovery,” he said
. Security personnel talk to the driver while monitoring the loading and unloading activities of containers at Port Tanjung Priok, Jakarta, Monday (17/7/2023). - (Antara/Indrianto Eko Suwarso) PARA The
October 2023 trade surplus came mainly from the continuing surplus of the non-oil and gas trade balance which reached 5.31 billion US dollars. The surplus was relatively stable compared to the previous month's achievement of 5.33 billion US dollars
.
The positive performance was supported by continued strong non-oil and gas exports especially coal commodities, precious metal products and jewellery, as well as footwear and steel iron manufacturing products. Based on destination country, non-oil and gas exports to China, the United States, and India remain the main contributors to Indonesia
's exports.
Meanwhile, nonoil and gas imports remained strong in line with continued improvement in economic activity. In addition, the oil and gas trade deficit was recorded to decrease slightly to 1.84 billion U.S. dollars in October 2023, in line with a deeper decline in oil and gas imports than a decline in its exports
.
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