Image: Reuters Berita 24 English - Even though Indonesia had a bigger-than-expected surplus in July, its statistics office warned on Monday ...
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| Image: Reuters |
Berita 24 English - Even though Indonesia had a bigger-than-expected surplus in July, its statistics office warned on Monday that the extra money it made from high commodity prices may start to go away.
The resource-rich country had a $4.2 billion surplus last month because of high commodity prices around the world. However, prices for some of its main products, such as palm oil, nickel, and natural gas, have gone down.
Reuters' poll said that July's trade surplus would be $3.93 billion, but the actual amount is more than that. In June, there was a $5.09 billion surplus.
Southeast Asia's largest economy has had a trade surplus every month since May 2020, when the export boom started. This has helped the country recover from the effects of the pandemic and eased the pressure on its currency, the rupiah, which was hurt by the strength of the U.S. dollar.
But Statistics Indonesia has warned that most of the country's export gains have been due to higher prices, while export volumes have stayed mostly the same.
"A rise in commodity prices drove the impressive growth in exports from January to July of 2022," said Setianto, the deputy head of the bureau.
"If prices for goods go back to normal, this windfall could end. Since the amount of our main exports stays the same, we may need to pay attention to this in the coming months "he added.
The poll predicted that exports would grow by 29.73%, but July's exports grew by 32.03%, to $25.57 billion.
Every month, less steel, tin, and nickel was shipped.
The poll expected imports to go up by 37.3%, but they went up by 39.86%, to $21.35 billion.
Statistics Indonesia also said that rising tensions in the Taiwan Strait could hurt trade, since China is Indonesia's biggest trading partner.
Wisnu Wardana, an economist at Bank Danamon, said that the trade surplus would keep shrinking for the rest of 2022, which would mean that foreign exchange reserves would get less help.
"A weakening first line of defense would put more pressure on Bank Indonesia to change its policy rate when external pressure gets stronger," he said, adding that the central bank would probably still keep interest rates the same at its next policy meeting on August 22-23.
