Flipped back to a trade surplus in August. Trade surplus may lead BI to become more confident to continue loosening monetary policy coupled with stronger Rupiah in the last couple of days.
Low inflation opened room for BI cutting rate for first time since 2017 to support growth.
Trade (5.26% YoY) and information and communications sectors (9.03% YoY) lifted out the growth.
If a trade deal to lift up previous tariff sanction is reached, it may give a boost to US and China economic.
Late harvest in several places as mentioned by coordinating minister of economic, mainly due to distributional problems. It made supply of shallot, chili, vegetables and some other food products were limited, hence boost the price.
Currency movement is also favorable as Rupiah move within 13,800 – 14,300 range.
The negative import growth of China in December has made Indonesia export to experience -4.6% YoY growth and made the trade balance remained high at USD 1.1 bn.
Initially, we expect that airlines baggage fee will push transportation inflation higher in January.
Industry wise, the main source of growth came from services sector especially trade and communication.