Indonesia recorded its 42th consecutive month of trade surplus amid higherthan-expected exports. Indonesia recorded a robust trade surplus of USD3.5bn in Oct 2023, up from USD3.4bn in Sep and higher than consensus expectation of USD3.4bn. 

Oil and gas (OG) exports grew by 6.6% y/y, continued its positive growth trajectory and non-oil and gas (non-OG) exports continued to fall by 11.4% y/y, better than prior month’s contraction of 17.7% y/y. Meanwhile, OG imports contracted by 4.7% y/y, larger than Sep’s contraction of 2.8% y/y or contracted 3.7% m/m. Non-OG imports also contracted by 1.9% y/y in Oct, lower than prior month’s contraction at 14.5% y/y due to higher imports in consumer, capital and raw material components. 

All in all, higher total consumer and raw material component imports indicate that household consumption and industrial activity started to improve. Coupled with the moderation in capital goods imports as investment accelerated in 3Q23 and the commissioning of several new smelters in 1Q24 are expected to thicken the trade surplus further.