Export & Import Performance in Indonesia (South East Asia’s Biggest Market)
Private and government participation is vital to the Indonesian mixed economy. The fact that this Country is Southeast Asia’s sole G20 member makes it possible for it to hold on to having not just being known for having one of largest economies but also for being classified as an emerging industry-based nation.With an estimated nominal GDP worth around $1,159 billion, in addition to a PPP-adjusted worth valued at around $3.507 billion respectively per a report released in 2021, it presently holds positions as both the world’s sixteenth largest economy based on its nominal value alongside being seventh-largest when evaluated via purchasing power parity.
Export and import performance in March 2022 managed to break the highest record in history. The export value in March 2022 was recorded at US$26.50 billion and this value increased significantly by 29.42% (mtm) or 44.36% (yoy). At the same time, the value of imports in March 2022 reached US$21.97 billion with a growth of 32.02% (mtm) or 30.85% (yoy).
With reference to the difference between exports and imports, Indonesia’s trade balance in March 2022 again experienced a sizable surplus, reaching US$4.53 billion. This surplus at the same time continues the surplus trend that has occurred since May 2020 or has occurred in a period of 23 months in a row.
Indonesia’s solid surplus performance in March 2022 was supported by export performance which continued to strengthen amidst a significant increase in the prices of various mainstay commodities. In March 2022, coal prices increased 49.91% (mtm), nickel grew 41.26% (mtm), and CPO increased 16.72% (mtm).
One of the real first steps of this program is evidenced by the transformation of exports from nickel ore to iron and steel derivative products (Fero Nickel). Based on the unit value of exports, the added value obtained from Fero Nickel products is up to 60 times greater than the value of nickel ore and concentrate commodities.
The increase in added value in production activities was also reflected in manufacturing activities which continued to be at an expansive level. Indonesia’s Manufacturing Purchasing Managers’ Index (PMI) in March 2022 was at position 51.3. This position is higher than the February 2022 level of 51.2, and is still continuing the expansion level for seven consecutive months. The increase in Indonesia’s PMI level was in line with the ASEAN Regional PMI which also experienced an expansion of 51.7, in which Singapore occupied the highest position (55.0) and was followed by the Philippines in second position (53.2). Furthermore, Indonesia’s PMI level is still above the PMI levels of other ASEAN countries such as Malaysia (49.6) and Myanmar (47.1).
PMI performance, which continues to expand, has contributed to the export of the manufacturing sector, which in March 2022 was able to grow by 23.99% (mtm) or 29.83 (yoy). This sector also dominates the composition of Indonesia’s exports with a portion reaching 72.69% of total exports.
Meanwhile, from the import side, it can be seen that the main composition was dominated by the raw/auxiliary materials category with a portion of 77.46% with an increase of 32.60% (mtm) or 31.53% (yoy). Followed by imports of capital goods with a portion of 14.26% which grew by 20.31% (mtm) or 30.12% (yoy). In addition, consumption imports were recorded as only 8.28% of total imports.
Even though the trade balance surplus continues, the Government will remain vigilant and continue to be responsive in facing various challenges that may arise, such as the slowing pace of the Eurozone economic recovery due to the Russia-Ukraine war, as well as the implementation of the lockdown that was recently reinstated in China. This condition is expected to affect export performance in the future.
On the other hand, increases in energy and food commodity prices also have the potential to push up global inflation. The price of crude oil continues to increase, where as of March 2022 it increased by 18.58% (mtm). At the same time, some global food prices also increased, such as soybean prices which rose 8.91% (mtm) and wheat prices which increased by 24.53% (mtm).