Exports rose to a 29-month high in December

• Exports growth expanded to a 29-month high (14.6%; consensus: 6.3%; Nov: 9.4%) beating market expectation
  • MoM: edged up for a second straight month (8.4%; Nov: 6.2%) to USD16.5b, a 7-year high.
  • 2020: Overall, exports fell at a slower pace (-2.6%; 2019: -6.8%) and lower than house projection of -7.0% to -4.0.
     
• Higher exports attributable to a sharp expansion in non-oil & gas based products as a result of higher shipment to China
  • Non-O&G (16.7%; Nov: 12.3%): broad-based improvement, led by manufacturing (18.9%; Nov: 14.3%), mining (4.5%; Nov: - 1.9%) and agriculture (17.0%; Nov: 33.0%) products. By destination, exports of non-O&G to top trading partners charted a continued expansion, led by shipments to China (43.4%; Nov: 37.3%) followed by the US (11.9%; Nov: 8.6%) and Japan (7.3%; Nov: 6.7%).
  • O&G (-10.1%; Nov: -26.3%): fell at a slower pace due to smaller contraction in both mining (-5.7%; Nov: -20.1%) and O&G manufacturing-based products (-34.2%; Nov: -58.9%).
     
• Imports fell marginally (-0.5%; consensus: -12.5%; Nov: -17.4%) as a rebound in non-O&G (4.7%; Nov: -12.3%) partially offset a steep drop of O&G product (-30.5%; Nov: -49.2%)
  • By segment, consumer goods (3.9%; Nov: -22.0%) and capital goods (3.2%; Nov: -2.8%) ended the year with a growth rebound and partially offset a marginal drop in raw materials (-2.0%; Nov: -20.0%).
  • MoM: moderated slightly (14.0%; Nov: 17.4%) on base effect, but reached USD14.4b, highest import value in 12 months.
     
• Trade surplus narrowed slightly to USD2.1b (consensus: USD2.3b; Nov: USD2.6b). Meanwhile, total trade rebounded sharply (7.1% YoY; Nov: -4.6%) to a 26-month high.
   
• Indonesia exports is projected to rebound this year (3.4%; 2020: -2.6%)
  • Continued economic recovery among key trading partners especially from China, relatively higher commodity prices and global vaccine rollout is expected to support the projected growth recovery for this year.

Source: Kenanga Research - 18 Jan 2021