Fadhil Haidar Sulaeman, Jakarta – Last year's global spike in commodity prices, while causing headaches for economies around the world, has helped Indonesia achieve its biggest-ever trade surplus.
Trade with the US was particularly advantageous for Indonesia, while Australia accounted for the biggest bilateral deficit.
The country's exports grew faster than imports in 2022, as natural resources remained the primary source of revenue, according to data presented on Monday by Statistics Indonesia (BPS) head Margo Yuwono.
The result was a full-year trade surplus of US$54.46 billion, up by a massive 53.67 percent year on year (yoy), thanks to increases in both prices and shipment volumes of Indonesian export commodities like coal, crude palm oil (CPO) and iron.
Global commodity prices skyrocketed following the Russian invasion of Ukraine in February last year, partly due to Western sanctions imposed on Russia, a major exporter of energy, metals and food.
This exacerbated supply-side disruption in a global economy that was already struggling with bottlenecks as countries simultaneously reopened business activities following the COVID-19 pandemic.
Although Indonesia did have to buy oil on the global market at a much higher prices, the trade balance remained in surplus throughout last year. In fact, exports have now exceeded imports for 32 consecutive months.
"This is the highest yearly trade surplus that was ever recorded," Margo told reporters on Monday.
The US accounted for the largest chunk of the overall trade surplus last year, as it imported $16.59 billion more from Indonesia than it exported to the archipelago.
When excluding oil and gas products, the bilateral trade relationship was even more in Indonesia's favor with a surplus of $18.89 billion.
Knitted clothes and electronics shipped from Indonesia contributed $2.86 billion and $2.83 billion, respectively, to the surplus.
Indonesia's largest bilateral trade deficit was with Australia, amounting to $6.39 billion, or $6 billion when disregarding oil and gas products, as a result of Indonesian imports of coal and cereals from Down Under to the tune of $1.93 billion and $1.72 billion, respectively.
Although lower than an estimate by state-owned Bank Mandiri of $4.76 billion, the surplus in December increased almost fourfold from a year earlier to $3.89 billion.
Last year, exports skyrocketed by 26.07 percent to $291.98 billion, with coal and CPO representing 18.83 percent and 12.05 percent of the total, respectively.
Shipments of manufactured goods, accounting for the lion's share of exports, increased by 16.45 percent yoy to $206.35 billion, followed by mining exports, which skyrocketed by 71.22 percent yoy to $64.92 billion.
Coal exports rose 67.64 percent year-on-year, while shipments of iron and processed nickel increased by around 32 percent and 22 percent, respectively.
Oil and gas exports and agricultural exports rose by 30.82 percent to $16.02 billion and by 10.52 percent to $4.69 billion, respectively.
The latest figures, however, point to a slowdown.
"In the last four months, our exports have decreased both in terms of value and volume," Margo explained, noting that although exports in December were up 6.58 percent yoy at $23.83 billion, they dropped 1.10 percent on a monthly basis.
Full-year imports rose 21.07 percent to $237.52 billion.
Raw material and auxiliary imports, the largest portion of imports, increased by 23.04 percent to $181.34 billion, followed by capital goods imports, which rose 26.99 percent to $36.35 billion.
Imports of consumption goods, by contrast, dropped by 1.74 percent to $19.83 billion due to lower imports of pharmaceuticals and finished textile products.
"High imports of raw and auxiliary materials means manufacturing is robust," Margo added.
Going forward, exports were expected to ease as demand for coal and CPO might drop due to a global economic slowdown, state-owned Bank Mandiri economist Faisal Rachman told The Jakarta Post.
The trade surplus, however, was expected to remain intact for longer than previously estimated, as the sudden lifting of China's COVID-19 lockdowns would slow down the commodity price decrease compared to earlier analyses, he added.
Meanwhile, the resumption of national strategic projects and the revocation of pandemic-related travel curbs in Indonesia would increase demand for imports.
World Bank data show that global average coal and nickel prices in December were up 123.54 percent yoy at $379.2 per tonne and 44.62 percent yoy at $28.9 per tonne, respectively.
CPO and iron, by contrast, were down 25.97 percent yoy at $940.4 per tonne and 4.38 percent yoy at $111.8 per tonne last month.
"A further shift from raw material exports to high-value-added exports makes exports rise and reduces volatility," Faisal explained.
Strong exports last year could also be a reflection of weak domestic demand, as excess production amounts that were not absorbed in the home market were instead sent abroad, Institute for Demographic and Poverty Studies (IDEAS) economist Askar Muhammad told the Post.
"This thesis is reinforced by the weakening of consumption imports," Askar explained on Monday.
Retail sales virtually stagnated last year with a minute increase of 0.04 percent.