The export plummeted due to the palm oil export ban to curb the rising domestic inflation from cooking oil prices hike in May-22. Besides, the slower import was still associated with China’s feeble economy as the China government still imposes several lockdowns there.
The inflation will go up with decent pace in 2H22 as the price normalization goes on especially on food and transportation prices after Ramadan month and the fuel price hike lately. Besides, the core inflation showed a slight deceleration compared to the previous month.
Current account balance posted a USD0.22 bn surplus in 1Q22 (0.07% of GDP) or lower than consensus at USD0.92 bn of surplus.
The export benefited from the elevated commodity prices while the import slowed down following China’s weaker economy last month.
Statistics Indonesia (BPS) recorded 0.66% MoM (2.64% YoY) of inflation in Mar-22. The inflation rate was higher than our estimate at 2.61% YoY and Bloomberg consensus at 2.53% YoY.
The thick trade surplus provides liquidity and stronger external resilience for Indonesia. We may witness the trade surplus persists in 2Q22 if several countries reimposing mobility restrictions due to the Covid-19 cases, just like China.
Related to the rising global political tension between Russia and Ukraine, we assess that the war has no major direct impact so far but indirect impact, ranging from food prices to energy.
Statistics Indonesia (BPS) recorded 0.02% MoM (+2.06% YoY) of deflation in Feb-22. The inflation rate was way lower than our estimate at 2.21% YoY and Bloomberg consensus at 2.30% YoY.
Statistics Indonesia reported a thin trade surplus at USD932.9 mn in Jan-22. The surplus was higher than our estimate and consensus at USD35 mn and USD199 mn, respectively.
Indonesia has been catching a cold during the global pandemic. The symptom was obvious, starting with the drop of people purchasing power then the shutdown of firms. Panic started to kick in and the government had to step in.