Indonesia: Trade surplus faces gradual narrowing – UOB

UOB’s Enrico Tanuwidjaja highlights that Indonesia’s trade surplus stayed sizeable at USD 3.36bn in September, with exports up 11.9% year-on-year and imports rising 18.4%. He notes resilient manufacturing and commodity exports, but faster import growth tied to domestic demand and investment. The report argues this pattern points toward a wider current account deficit and a more volatile external backdrop over the medium term.

Trade buffers seen moderating ahead

"While the recent trade surpluses are encouraging, they do not signal a return to the exceptionally large and persistent surpluses seen during 2021–2025."

"However, the simultaneous acceleration in imports reflects strengthening domestic demand and points to a gradual moderation in external surpluses going forward."

"While recent trade outcomes point to a more balanced external position, the underlying trend continues to suggest a gradual narrowing of Indonesia's external buffers as domestic demand improves and investment-related imports rise."

"Consequently, Indonesia's current account balance is likely to remain in deficit over the coming quarters."

"The trend remains consistent with an expectation of a wider current account deficit and a more volatile external environment over the medium term."