● Exports growth contracted for the fourth straight month (-3.3%; consensus: -4.4%; Sep: -0.8%)
- MoM: moderated (3.1%; Sep: 6.6%) to USD14.4b.
● Growth slowdown in non-oil & gas and oil & gas-based products weighed on exports growth
- Non-O&G(-1.8%; Sep: 0.1%): growth contracted on weak mining (-33.3%; Sep: -36.0%) and slower manufacturing (3.7%; Sep: 7.0%), but partially supported by higher shipment of agriculture (24.0%; Sep: 16.6%) products.
- By destination, exports to top trading partners slowed, led by lower shipment to China (3.4%; Sep: 9.1%) and the US (6.8%; Sep: 13.8%). In addition, exports to Japan declined for the tenth straight month (-14.4%; Sep: -6.9%).
- O&G(-26.9%; Sep: -16.8%): fell sharply due to weak mining (-25.3%; Sep: -8.3%) and a sharp drop in O&G manufacturing-based products (-33.5%; Sep: -16.8%).
● Imports fellto a three-month low (-26.9%; consensus: -18.7%; Sep: -18.9%) mainly due to a steep decline in both non-O&G (- 25.4%; Sep: -17.9%) and O&G product (-38.5%; Sep: -26.3%)
- By segment, it was due to a broad-based slowdown led by raw materials (-27.4%; Sep: -19.0%) followed by capital goods (- 24.2%; Sep: -17.7%) and consumer goods (-27.9%; Sep: -20.4%).
- MoM: fell to a five-month low (-6.8%; Sep: 7.7%) to USD10.8b
● Trade surplus widened to USD3.61b (consensus: USD2.3b; Sep: USD2.4b)almost reaching a record high in Dec-2010 (USD3.68b). Meanwhile, total trade remained weak (-15.1%; Sep: -9.9%).
● 2020 export forecast retained at -7.0% to -4.0% (2019: -6.8%)
- Year-to-date, exports fell by 5.6% as the ongoing COVID-19 pandemic continued to hit external demand
- With the surge in new coronavirus cases globally, Indonesia’s external demand is expected to remain weak in the near term. However, growth would be supported by economic recovery from China, its major trading partner.
Source: Kenanga Research - 17 Nov 2020