Indonesia’s Trade Surplus Misses Forecast as Inflation Hits 20-Month High

Post by : Saif

Indonesia’s trade surplus in November 2025 came in at $2.66 billion, slightly below expectations, as exports of key commodities weakened, while inflation in December rose to its highest level in 20 months, official data showed on Monday.

Economists had forecast a trade surplus of $3.06 billion for November, following October’s surplus of $2.39 billion. Southeast Asia’s largest economy maintained a positive trade balance for January to November 2025, largely boosted earlier in the year as manufacturers rushed shipments to avoid U.S. tariffs introduced in August.

However, exports have slowed in recent months, falling 6.6% year-on-year in November to $22.52 billion, compared with a forecasted 0.53% drop. The decline was driven mainly by lower shipments of Indonesia’s top commodities, including coal, palm oil, nickel, and copper, according to Statistics Indonesia.

Imports in November were valued at $19.86 billion, up 0.46% from the same period last year, though analysts had expected a 3.2% increase. Permata Bank economist Faisal Rachman said the trade surplus is expected to continue but gradually narrow as import growth outpaces exports, reflecting the government’s increasingly pro-growth policy stance.

Indonesia has been actively seeking to diversify its trade partners. The country recently finalised free trade talks with the European Union and signed a deal with the Russian-led Eurasian Economic Union. Jakarta is also aiming to secure a U.S. tariff agreement by the end of January.

On the domestic front, annual inflation in December accelerated to 2.92%, higher than the forecast of 2.73%. Rising prices of gold, some food items, and disruptions caused by floods and landslides in northern Sumatra contributed to the increase. Although this is the highest inflation rate since April 2024, it remains within Bank Indonesia’s target range of 1.5% to 3.5%.

Core inflation, which excludes government-controlled prices and volatile food items, stood at 2.38% in December, slightly below the 2.40% expected. Faisal Rachman noted that inflation is expected to remain within the central bank’s target, allowing Bank Indonesia to continue its accommodative monetary policy to support economic growth.

Overall, while Indonesia faces short-term pressures from slower export growth and rising inflation, the government’s efforts to expand trade partnerships and the central bank’s supportive policy stance are expected to maintain economic stability in the coming months.

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