Economist Predicts Trade Balance June 2022 Will Surplus of 3.34 Billion US Dollars

Illustration (Photo: Antara Doc)

JAKARTA - Bank Mandiri Chief Economist Faisal Rachman estimates that Indonesia's trade balance in June 2022 will experience a surplus of USD 3.34 billion.

"Trade performance is expected to improve as Indonesia has decided to lift the ban on palm oil exports which has lasted for three weeks from April 28, 2022, to May 22, 2022," Faisal said as quoted by ANTARA, Wednesday, July 13.

Previously, the government stopped the export of crude palm oil and some of its derivative products to curb the increase in domestic cooking oil prices.

Faisal estimates that Indonesia's exports in June 2022 will grow 30.51 percent year on year and 12.51 percent month to month.

Monthly export growth in June 2022 was higher than exports in May 2022 which fell 21.29 percent month-on-month due to the lifting of the ban on palm oil exports.

"We see coal prices continue to rise in June 2022 while CPO prices fall," he said.

Imports are expected to grow by 21.15 percent year on year or slower than export growth in June last year which was 30.74 percent year on year (yoy).

"Imports grew in line with the continued recovery in domestic economic demand and post-Eid, due to the seasonal factor of the Eid holiday," he said.

Faisal still estimates that the current account balance will record a small surplus in 2022.

"We maintain our expectation that the trade surplus in the future is likely to shrink as imports will follow exports as the domestic economic recovery accelerates," he said.

Prices of most commodities began to decline amid fears of a global recession that could lead to stagflation.

Therefore, Indonesia's export performance has the potential to weaken in the second semester of 2022.

"Overall, we still estimate that the current account balance in 2022 has the potential to record a small surplus of 0.03 percent of Gross Domestic Product (GDP) or smaller than the current account surplus in 2021 which is 0.28 percent of GDP," he said.