- Trade surplus narrowed to USD 2.48 Bn, due to rising imports of capital goods and rice. But exports also grew strongly thanks mainly to CPO (both price and volume).
- High CPO prices should help replenish liquidity in producing areas like Sumatra, aligning with our thesis that growth may have bottomed out in Q3-24.
- Despite positive terms of trade, the arrival of Trump may darken the outlook for Indonesia’s trade balance, due to disruptions from tariff and re-routing of Chinese products.
- However, stronger USD may be the most salient threat in the short-term, given it tends to be inversely correlated to commodity prices.
