JAKARTA (Bloomberg): Indonesia posted its smallest trade surplus in more than five years on signs importers are stocking up on goods from China and other key trading partners to mitigate the risks of rising global tariffs.
The surplus narrowed to US$159 million in April, its smallest since October 2019 and far below a median estimate of US$2.8 billion in a Bloomberg survey of analysts.
Imports into Southeast Asia’s largest economy jumped by 22% year-on-year to $20.59 billion in the month, helped by increases in capital goods, raw materials and consumer goods, according to Indonesia’s statistics agency on Monday.
Exports rose just 5.8% to $20.76 billion, with higher shipments of coffee and basic metals helping to offset a 21% drop in mining exports that was partly caused by weaker coal shipments.
The sharp rebound in imports suggests pre-emptive restocking at a time of rising trade risks due to higher US tariffs, according to Hosianna Evalita Situmorang, an economist at PT Bank Danamon Indonesia.
Imports from China, Indonesia’s largest trading partner, rose by 54% year-on-year. Goods from Japan and Singapore were also significantly higher.
The statistics agency in a briefing didn’t provide a detailed breakdown by category of monthly imports from individual countries. Indonesia’s imports from China through April this year comprised mainly mechanical and electrical machinery and equipment, along with vehicles and parts.
The pattern of higher imports due to pre-emptive restocking could continue in the coming months given ongoing trade headwinds, including from US President Donald Trump’s higher steel import tariffs that are due to take effect in June, as well as an end to the tariff reprieve in July, Situmorang said.
Mining exports will also likely remain under pressure from tariff risks and weak demand in China, she said.
The smaller surplus could also weigh on Indonesia’s current account, although pressures should be "manageable thanks to low oil prices and steady services,” Situmorang added.
Indonesia in recent years has posted monthly trade surpluses typically well over $1 billion. The country last posted a trade deficit in April 2020.
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