JAKARTA: Indonesia swung to a trade surplus in October due to a slower-than-expected drop in exports, despite weak global trade amid the US-China trade war, data from the statistics bureau showed on Friday (Nov 15).
Southeast Asia's largest economy recorded a trade surplus of US$161.3 million in October, the data showed, compared with the median forecast in a Reuters poll for a deficit of US$280 million.
In recent months, Indonesia had been swinging back and forth from posting small deficits to small surpluses. In September, it had a deficit of US$164 million while in August a surplus of US$112 million.
Satria Sambijantoro, economist at Bahana Sekuritas in Jakarta, said the October data looked "impressive" amid sluggish global trade and the protracted US-China trade war.
"Falling exports must be seen in context. Exports had beat consensus forecast for two months in a row, driven by manufacturing exports," he said.
Indonesia's exports in October amounted to US$14.93 billion, down 6.13 per cent on-year. The poll had expected an 8.38 per cent drop in the overall exports.
On a monthly basis, exports rose 6 per cent, driven by a 5 per cent increase in shipments of manufactured goods such as cars and sport shoes.
Meanwhile, October imports dropped 16.39 per cent annually, the sharpest in five months, to US$14.77 billion. The drop was roughly in line with the poll's prediction of a 16 per cent fall.
Authorities in Indonesia have made improving the trade performance a top priority, seeking for ways to boost exports and find import substitutions following last year's record high deficit of US$8.7 billion.
Andry Asmoro, Bank Mandiri's chief economist, said the smaller-than-expected export contraction was more to do with last year's high base figure, rather than any significant impact from the government efforts.
Asmoro said the surprising surplus could mean this year's current account deficit would be smaller than his current forecast of 2.8 per cent of GDP. Last year's deficit was 3 per cent of GDP.
Asmoro said Bank Indonesia (BI), which tracks trade and current account deficits when deciding monetary policy, is unlikely to make a fifth rate cut in next week's policy meeting in response to the trade data.
BI has already brought down its key rate by 100 basis points in four successive cuts since July to try to lift economic growth amid a global slowdown.
BI targets current account deficit at a range of 2.5 per cent to 3 per cent of GDP in 2019 and 2020.
Indonesia had a US$1.79 billion trade deficit in January-October, significantly smaller than the US$5.57 billion gap in the corresponding period last year.