Trade surplus extends to 59 straight months
According to Statistics Indonesia (BPS), Indonesia’s trade surplus rose to USD4.33 bn in Mar-25 from USD3.12 bn in Feb-25. This figure exceeded both our forecast of USD4.00 bn and the consensus estimate of USD2.86 bn, marking the 59th consecutive monthly surplus since May-20. The March trade surplus was primarily supported by a USD6.00 bn surplus in the non-oil and gas (NOG) sector, which more than offset a –USD1.57 bn deficit in the oil and gas (OG) sector. The United States remained Indonesia’s largest contributor to the trade surplus at USD1.98 bn, while China recorded the largest trade deficit at –USD1.11 bn in Mar-25. Looking ahead, geopolitical uncertainties, China’s sluggish economic recovery, moderating commodity prices, and rising protectionist policies from the US could weigh on Indonesia’s export performance and cap the trade surplus. In light of these risks, we revise our projection for Indonesia’s current account deficit to –1.0% of GDP in 2025. We also lower our rupiah projections to Rp16,500/USD for average 2025 and Rp16,600/USD for year-end 2025, reflecting heightened geopolitical and global financial uncertainties, escalating trade tensions, stagnant domestic growth, and a wider fiscal deficit.
Strong demand from China boosts export growth
Indonesia’s total exports rose by +5.95% MoM and +3.16% YoY to USD23.25 bn in Mar-25, surpassing both our projected annual growth of +1.80% YoY and the consensus estimate of –2.40% YoY. Breaking down the data, OG exports increased by +28.81% MoM and +13.05% YoY to USD1.45 bn, while NOG exports grew by +4.71% MoM and +2.56% YoY to USD21.30 bn. The strong monthly export performance was primarily driven by a 21.50% MoM increase in exports to China, reaching USD5.19 bn. We attribute this surge largely to a low base effect, as February had fewer working days in China due to the Lunar New Year holiday.
Fasting season and OG imports drive modest import growth
Total imports rose by +0.38% MoM and +5.34% YoY to USD18.92 bn in Mar-25, falling short of both our forecast of +5.50% YoY and the consensus estimate of +6.00% YoY. Breaking down the data, OG imports reached USD3.13 bn (+9.07% MoM but –5.98% YoY). Meanwhile, NOG imports stood at USD15.79 bn (–1.18% MoM but +7.91% YoY. The increase in OG imports was primarily driven by a –13.03% MoM drop in crude oil (WTI) prices to USD60.7/bbl. On a product basis, imports of consumption and capital goods rose significantly, by +18.73% MoM and +7.28% MoM to USD1.74 bn and USD3.70 bn, respectively. The rise in consumption goods imports was supported by higher demand during the fasting period, reflected in sharp increases in vegetable and fruit imports, which surged by +239.29% MoM and +56.63% MoM, respectively. In contrast, imports of raw material goods declined by –3.26% MoM to USD13.48 bn. This contraction is consistent with the drop in Indonesia’s Manufacturing PMI, which fell to 52.4 in Mar-25 from 53.6 in Feb-25, signaling a slowdown in manufacturing activity.
Navigating US tariff risks
In early April, Trump proposed a possible 32% import tariff on Indonesian goods. Although the plan is still under negotiation and hasn’t been enforced, the government needs to stay alert. To reduce risks, Indonesia should diversify its export markets, strengthen regional trade partnerships, and improve product competitiveness. At the same time, Indonesia could take advantage of the high tariffs on Chinese goods—up to 245%—to increase its share in the US market. As part of its negotiation strategy, the government is considering boosting imports from the US by easing some regulations, such as revising rules on local content (TKDN) and import quotas. However, these changes may hurt local industries, shrink the trade surplus, and create uncertainty for investors.
