Trade surplus continues its decline, with October’s figures failing to hit forecasts. Bank Indonesia (BI) held the benchmark rate once again, as we predicted – and we’re glad to see it. Whilst BI may have steadied the ship inflation-wise, we’re concerned that external forces that are eroding the trade surplus will have deeper negative effects in the short to medium term.
Last month in our introduction we said “it seems that most analysts are now expecting a further rate cut by the BI when they meet on 19th November – we’re not. We anticipate a further hold, but we think there’s potential for a return to 5% should inflation keep trending upward.” Once again, we were on the money. Trade Indonesia’s trade surplus continues its decline. In August the country recorded a surplus of US$5.49Bn whereas in September the surplus narrowed to $4.34Bn, and although forecasts for October were an even lower $3.5Bn sadly the latest data show a steeper decline to just $2.4Bn – the lowest since April. W...
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