JAKARTA: Indonesia posted a trade surplus of $4.18 billion in July, beating expectations on strong shipments of palm oil products and machinery, while imports fell, official data showed on Monday.
The July surplus was slightly higher than the $4.1 billion recorded for the previous month, and stronger than a $3.2 billion forecast from analysts polled by Reuters.
Exports, worth $24.75 billion, continued a strong growth of 9.86%, the statistics bureau said, above the 5.2% increase predicted in the poll. The June export growth was 11.3%. Ahead of the release, Indonesia's chief economic minister Airlangga Hartarto said the host of data would show the fundamentals of Southeast Asia's largest economy were strong, trying to shore up market confidence after widespread political protests sparked selling of stocks and the currency.
Exporters had sped up U.S.-bound shipments ahead of the full imposition of U.S. tariffs, helping boost export figures in the past few months even as prices of some of Indonesia's top commodities like coal and nickel remained low. The U.S. set a tariff rate of 19% on shipments from Indonesia, which took effect on August 7, in line with regional peers and well below the 32% rate first flagged in April.
There was also a more than 80% annual rise in shipments in July of vegetable and animal fats - a grouping of products that includes palm oil, the bureau said.
Meanwhile, imports shrank by an annual 5.86% to $20.57 billion in July, more than the poll's 5% drop, marking the biggest contraction since May 2024. Indonesia logged a 2.31% annual inflation in August, below the 2.48% expectation in the Reuters poll and inching down from 2.37% in July, as the government's subsidies for transportation fares counterbalanced a rise in prices of shallots and rice.
Core inflation, which strips off volatile food prices and government-controlled prices, was at 2.17%, slower than the 2.30% survey forecast.
Both rates were comfortably within the central bank's 1.5% to 3.5% target range for 2025.
Bank Indonesia has cut interest rates five times over the past year and Governor Perry Warjiyo has said it could reduce borrowing costs further to support the economy.
"With inflation under control, it provides room for cautious adjustments to the benchmark interest rate to support economic growth, as long as exchange rate stability and inflation expectations remain manageable," said Bank Permata economist Josua Pardede. - Reuters
