- Trade surplus rose to USD 2.89 billion in August, but may remain relatively narrow as export growth lagged behind imports (7.13% vs. 9.46% YoY).
- Exports was driven by a rebound in CPO exports, higher metal ore shipments, and increased exports of electrical equipment (HS85) and machinery (HS84).
- Consumer goods remain weak vis-à-vis raw materials (ex-oil) and capital goods, but an uptick in cereal imports may signal government support for demand ahead of the Regional Elections.
- Resolving the current slowdown is not a simple matter of cutting interest rates, but may require a combination of fiscal expansion, SRBI unwinding, and a controlled depreciation of Rupiah.
