Indonesia’s trade surplus shrinks to lowest in 5 years in April

Indonesia booked a trade surplus of around $160 million in April, the lowest since April 2020, amid a surge in imports, while the country's inflation cooled in May, data from the statistics bureau showed on Monday.

A Reuters poll of analysts had predicted a surplus of $3.04 billion.

Southeast Asia's biggest economy has recorded a trade surplus every month for five years, supporting its external balance. But the April print was the narrowest in that period; the surplus in March was $4.33 billion.

Last month, imports jumped 21.84% on a yearly basis to $20.59 billion, with capital goods rising the most. The median forecast in the poll was for a 7.75% rise.

Exports from the resource-rich country rose 5.76% in April from a year earlier to $20.74 billion, matching the poll's median forecast. Shipments of mining products slid more than 20%, hurt by weak coal prices.

Shipments to the United States in the reported month reached $2.08 billion, with some of it being affected by Washington's 10% tariff imposed in early April.

The U.S. is one of Indonesia's biggest trade partners, and Jakarta is currently negotiating with Washington to reduce tariffs set to take effect in July.

Barra Kukuh Mamia, Bank Central Asia's economist, said the higher-than-consensus import growth was due to an influx of products from China and Singapore.

"All these indicate temporary disruptions related to Trump tariffs, which may reverse in May as Trump suspended the tariff on China," he said.

Meanwhile, the bureau's data showed Indonesia's annual inflation rate in May decelerated more than expected to 1.60%, compared with 1.95% in April. A Reuters poll had predicted inflation would remain steady at 1.94%.

The April core inflation rate also came in slightly below forecast at 2.4%. The poll had estimated a 2.5% rate.

The April rate was close to the lower end of the local central bank's 1.5%-3.5% target range. Taking advantage of low inflation, the central bank has cut interest rates three times since September.

The factor keeping inflation low was an increase in rice output. Rice production in the January-July period is estimated to reach 21.76 million metric tons, up nearly 15% year-on-year, the bureau said.