Minister of Trade, Zulhas: Exports in August 2023 Increase, Encouraging Increase in Trade Balance Surplus

JAKARTA – Minister of Trade Zulkfili Hasan said that Indonesia's trade balance in August 2023 again recorded a trade surplus of 3.12 billion US dollars. This figure is higher than the July 2023 period.

Zulhas, Zulkifli Hasan's nickname, said that the August surplus consisted of a non-oil and gas surplus of 4.47 billion US dollars and an oil and gas deficit of 1.34 billion US dollars.

"Exports increased in August and Indonesia's trade balance recorded a trade surplus of 3.12 billion US dollars. "This means that the surplus is higher than in July 2023 which amounted to 1.29 billion US dollars," he said in an official statement, written Tuesday, September 19.

Based on trading partner countries, Indonesia's largest trade surplus in August 2023 is with India amounting to 1.39 billion US dollars.

This surplus was driven by the commodities of vegetable animal fats and oils (HS 15), mineral fuels (HS 27), as well as ores, slag and metal ash (HS 26). Then, the next surplus with the United States was 1.16 billion US dollars and the Philippines was 0.83 billion US dollars.

Meanwhile, the trading partner countries contributing to the trade deficit in August 2023 were Singapore 0.73 billion US dollars, Australia 0.61 billion US dollars, and Thailand 0.20 billion US dollars.

Cumulatively, in the January-August 2023 period, Indonesia's trade balance recorded a surplus of 24.34 billion US dollars. This surplus figure was lower by 10.55 billion US dollars compared to the same period last year. Zulhas said the surplus was driven by the non-oil and gas sector at 36.39 billion US dollars and the oil and gas sector deficit at 12.05 billion US dollars.

Indonesia's Export Performance in August 2023 Increases

Indonesia's exports in August 2023 reached 22.00 billion US dollars or an increase of 5.47 percent compared to July 2023 (MoM).

The increase in exports in August was driven by growth in non-oil and gas exports by 5.35 percent and oil and gas exports which rose 7.50 percent (MoM).

The increase in export performance occurred in all sectors in August 2023. The mining sector was the sector that experienced the highest increase in exports at 15.37 percent, followed by the oil and gas sector at 7.50 percent, agriculture at 3.36 percent, and industry at 3.22 percent (MOM).

Several main non-oil and gas export products that will increase in August 2023 include metal ore, slag and ash (HS 26) up 223.50 percent; clothing and accessories (knitted) (HS 61) rose 46.16 percent; copper and goods therefrom (HS 74) rose 30.66 percent; coffee, tea and spices (HS 09) rose 8.08 percent; and animal/vegetable fats and oils (HS 15) rose 7.56 percent (MoM).

Amid the increase in exports in August 2023, continued Zulhas, there were several main non-oil and gas export products which experienced a significant decline, including goods made of steel (HS 73) which fell 45.57 percent; tin and articles thereof (HS 80) fell 30.81 percent; nickel and articles thereof (HS 75) fell 13.63 percent; inorganic chemicals (HS 28) fell 8.85 percent; and mineral fuel (HS 27) fell 8.42 percent (MoM).

The main destination countries for Indonesia's non-oil and gas exports in August 2023 are China with an export value of US$5.38 billion, the United States USD 2.13 billion and India USD 1.84 billion.

Apart from these three countries, ASEAN is an important trading partner and a potential export destination for Indonesia. Indonesia's non-oil and gas export share to ASEAN reached 18.47 percent in August this year.

"Ahead of the ASEAN Summit which will be held in early September 2023, Indonesia's non-oil and gas export performance in August 2023 to the ASEAN region increased by 5.98 percent (MoM), mainly driven by an increase in exports to the Philippines and Myanmar which rose by 14.11 percent respectively and 22.58 percent (MoM)," said the Minister of Trade.

Some of the main destination markets for Indonesia's non-oil and gas exports that experienced the largest increase in August 2023 were Germany, which rose 50.10 percent, the Russian Federation, which rose 30.74 percent; South Africa rose 28.86 percent; Australia rose 22.92 percent; and South Korea rose 21.62 percent (MoM).

Looking at regions, the largest increase in exports occurred in several regions such as Central Asia, which rose 324.47 percent; North Africa rose 95.07 percent; East Africa rose 40.00 percent; Central Africa rose 36.79 percent; and Eastern Europe rose 33.88 percent (MoM).

Cumulatively, exports during the January-August 2023 period reached 171.52 billion US dollars, down 11.85 percent from the same period in 2022 (yoy).

The decline in export value was driven by weakening non-oil and gas exports by 12.27 percent and oil and gas exports by 4.66 percent yoy.

"Even though the trade balance surplus trend will continue until August 2023, Indonesia needs to be aware of the shrinking trade surplus in line with weakening commodity prices on the global market and a decline in commodity exports compared to last year," he said.

"To maintain a trade surplus this year, the Ministry of Trade is making efforts to encourage high-value added exports and export market penetration to non-traditional countries," he said.