• Exports slowed slightly in September (6.4% YoY; Aug: 6.6%), below market expectations (8.0%), but remained positive for the sixth straight month
  • MoM: contracted (-5.8%; Aug: 5.4%), a three-month low.
• Exports remained supported by strong shipments of non-O&G, but partially weighed by weak O&G
  • Non-O&G (8.1%; Aug: 7.5%): growth expanded, due to higher mining (9.0%; Aug: 2.8%) and relatively solid agriculture (39.3%; Aug: 40.2%) but was partially capped by a slower manufacturing (6.3%; Aug: 8.9%). By destination, it was contributed by a rebound in shipment to China (3.5%; Aug: -0.8%), but the momentum was partially weighed by a moderate growth to other major export destinations, namely the US (20.9%; Aug: 22.4%) and Japan (14.8%; Aug: 17.8%).
  • O&G (-16.7%; Aug: -8.7%): deeper contraction due to weak manufacturing (-37.2%; Aug: -29.7%) and mining (-5.5%; Aug: 4.5%).
• Imports moderated to a three-month low in September (8.6%; Jun: 9.5%), and lower than consensus (11.8%) due to a sharp fall in the demand for O&G (-24.0%; Aug: -0.5%)
  • By category, growth was led by higher capital goods (18.4%; Aug: 11.9%) and a rebound in consumer goods (11.3%; Aug: -7.4%). However, the momentum was partially capped by a slowdown in raw materials (5.9%; Aug: 11.5%).
  • MoM: fell sharply (-8.9%; Aug: -4.9%) to a 14-month low.
• Trade surplus widened (USD3.3b; Aug: USD2.8b), a six-month high and beating consensus (USD2.8b), as imports fell more than exports on a MoM basis
  • Meanwhile, total trade moderated slightly (7.4% YoY; Aug: 7.9%).
• 2024 export forecast maintained at 0.8% (2023: -11.3%), due to last year's low base
  • Year-to-date, exports rebounded by 0.3% (Jan-Aug: -0.4%) thanks to a sustained turnaround in export growth amid a low base effect recorded in the 2H last year, and further backed by a positive performance in the non-oil & gas product. Looking ahead, we continue to expect export growth to sustain a positive momentum in the near term. This is partly because we continue to expect a gradual economic recovery in China, Indonesia's largest trading partner, following a sizeable stimulus to stimulate the economy.

Source: Kenanga Research - 16 Oct 2024