Indonesia's export growth slowed to a three-month low in June, increasing by 1.2% year-on-year, falling short of market expectations of 5.1%, according to a report by Kenanga Investment Bank (Kenanga) today (July 16, Tuesday). Despite this moderation, exports remained positive for the third consecutive month, with the non-oil and gas sectors showing resilience amidst challenges.

The slowdown was primarily driven by weaker shipments in both non-oil and gas sectors, which expanded by 1.4%, and oil and gas sectors, which contracted by 2.3%. Non-oil and gas exports were buoyed by increased manufacturing and agriculture shipments, although mining exports saw a significant decline. Major trade partners like China and the US recorded varied performance, with exports to Japan notably plunging to a five-month low.

Imports rebounded sharply by 7.6% in June, surpassing expectations, driven by increased shipments of oil and gas products and a recovery in consumer goods and raw materials. However, imports fell by 4.9% month-on-month, indicating a mixed trend in trade dynamics for Indonesia.

The trade surplus narrowed to USD2.4 billion in June from USD2.9 billion in May, below the consensus forecast of USD3.0 billion. This narrowing was attributed to a faster decline in exports compared to imports for the month, despite an overall rebound in total trade by 4.1% year-on-year.

Kenanga Investment Bank (Kenanga) maintained its 2024 export growth forecast at 0.8%, banking on a steady recovery expected in the second half of the year. The bank cited ongoing challenges including slower-than-expected global economic recovery and disruptions from the Red Sea crisis impacting global port operations.