DIGIVESTASI - Indonesia Records 49 Consecutive Months of Trade Surplus Despite Slowing Exports and Imports. Indonesia has set a new record by achieving a trade surplus for 49 consecutive months. However, the trend of exports and imports has shown a slowdown since last year. "Both exports and imports have grown more slowly," said Professor of Economics and Business Telisa Aulia Falianty on Friday (June 21, 2024).

Data presented by Telisa indicates that Indonesia's export performance began to decline in the second quarter of 2023, after experiencing a commodity boom from 2021 to 2022. Year-on-year, Indonesia's exports in the second quarter of 2023 grew negatively by 17.56%. This decline continued in the third quarter with a figure of minus 17.8%, the fourth quarter of 2023 minus 8.9%, and the first quarter of 2024 minus 7.7%.

Import performance also experienced a slowdown since the first quarter of 2023 with negative growth of 5.1%. This figure further declined in the second quarter of 2023 by minus 11.2%, the third quarter of 2023 minus 10.7%, the fourth quarter of 2023 minus 1.7%, and the first quarter of 2024 minus 0.65%.

"Export growth is far more contracted than import growth, which is concerning," she stated.

Telisa mentioned that the decline in Indonesia's export and import performance is influenced by global conditions. According to her, the slowdown in global trade has impacted Indonesia's domestic economy. "There is indeed a slowdown in global trade," she said.

She emphasized that the government needs to find solutions to address this issue. The decline in exports and imports could disrupt foreign exchange reserves and the value of the rupiah. "Our foreign exchange reserves will be affected and further could lead to more depreciation of the rupiah," she said.

Previously, the Central Statistics Agency (BPS) reported that Indonesia's trade balance in May 2024 was still in surplus by US$2.93 billion, with exports reaching US$22.33 billion and imports US$19.40 billion.

The value of imports in May 2024 increased by 14.40% month-on-month but decreased by 8.83% year-on-year. From January to May, the value of imports also fell by 0.42%. Meanwhile, Indonesia's cumulative exports decreased by 3.52%, although they were still positive year-on-year at 2.86%.

Esther Sri Astuti, Executive Director of the Institute for Development of Economics and Finance (Indef), assessed that export-import data shows signs of weakening. "The condition of declining imports and exports means that Indonesia's economy is slowing down," said Esther.

According to Esther, this economic weakening is caused by both internal and global factors. Domestically, Indonesia's exports are still dominated by raw commodities, resulting in minimal added value. Globally, geopolitical conflicts have reduced global demand for Indonesian products. "Global factors due to geopolitical conflicts have hindered the distribution of goods and reduced the supply of goods in the market," she explained.

Amalia Adininggar Widyasanti, Deputy for Economic Affairs at the National Development Planning Agency (Bappenas), said that the decline in export-import values is due to the weakening of global commodity prices. "It's not a drop, but rather it's happening along with the weakening of global commodity prices," said Amalia.

Amalia mentioned that Indonesia's exports are currently still dominated by coal and palm oil (CPO) commodities, whose prices are highly dependent on global demand. "If we are dominated by non-processed commodity exports, we will always be vulnerable to commodity price volatility," she said.

Going forward, the government will focus on downstream programs. Amalia mentioned that the downstream program has succeeded in making semi-finished commodities such as iron and steel the third largest contributor to exports in May 2024.

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