• Exports expanded for the second straight month (2.9% YoY; Apr: 1.7%), the fastest pace in 15 months and beating market expectations (-1.0%)
  
  − MoM: rebounded sharply (13.8%; Apr: -13.0%) following a sharp decline in the previous month.

• Increased exports due to higher shipment of both non-O&G and O&G products
  
  − Non-O&G (2.5%; Apr: 1.3%): expanded for the second consecutive month, partly as manufacturing (4.6%; Apr:8.8%), and agriculture (2.4%; Apr: 2.6%) continue to increase albeit at a slower pace. Meanwhile, mining fell for the 15th straight month (-4.8%; Apr: -17.0%) but growth contraction eased. By destination, growth was contributed by higher shipment to major trading partners led by the US (6.6%; Apr: 11.5%) and Japan (0.8%; Apr: -1.8%). Notably, shipment to China (-0.9%; Apr: -7.4%) remained weak but the contraction eased.
  
  − O&G (8.4%; Apr: 7.3%): expanded for the second straight month, mainly due to higher export of mining (16.4%; Apr: 20.9%), while the contraction in manufacturing (-8.8%; Apr: -13.3%) eased.

• Imports contracted (-8.8%; Apr: 10.1%), but better than expectations (-9.9%), weighed by weak shipment in non- O&G (-8.2%; Apr: 12.3%) and O&G (-12.3%; Apr: 1.0%)
  
  − By category, weaker growth was mainly due to a broad-based weakness led by raw materials (-7.5%; Apr: 8.5%), followed by capital goods (-10.1%; Apr: 22.0%) and consumer goods (-16.2%; Apr: 2.8%) and partly due to high base effect in the same month of last year.
  
  − MoM: rebounded sharply (14.8%; Apr: -5.9%) to a 12-month high following the fifth straight month of contraction.

• Trade surplus widened (USD2.9b; Apr: USD2.7b), slightly lower than consensus (USD3.0b), as YoY exports outpaced the decline in imports
  
  − Meanwhile, total trade declined in May (-2.9% YoY; Apr: 5.4%).

• 2024 export forecast maintained at 0.8% (2023: -11.3%)
  
  − We reiterated our cautiously optimistic outlook despite two straight months of growth expansion recorded since April.This is primarily because we continue to expect a slower rebound in Indonesia’s exports in the near term, as exports of non-O&G products remained fragile alongside lower commodity prices. Additionally, the impact of the Red Sea conflict and port congestion has also added to our cautious outlook.

Source: Kenanga Research - 20 Jun 2024