• Indonesia’s Jan-26 trade surplus narrowed sharply to USD 0.95bn, falling from USD 3.49bn in Jan-25, coming in well below both SSI’s forecast (USD 2.6bn) and market consensus (USD 2.8bn), marking a clear downside surprise. This represents the smallest surplus since Apr-25 and signals a temporary moderation in Indonesia’s external buffer position following a relatively resilient close to 2025.
• The contraction was driven primarily by lower exports, up only 3.4% YoY to USD 22.2bn, on weaker shipments of key commodities, particularly iron, steel and coal, most likely caused by China’s economic slowdown. Oil and gas exports also dropped 15.6% YoY to USD 0.9bn, underscoring Indonesia’s ongoing exposure to commodity price dynamics and production variability.
• On imports, which surged 18.21% YoY to USD 21.2bn, capital goods grew the most up 35.2% YoY to USD 4.5bn, reflecting significant rise in government capital spending aimed at structural improvements and national food security initiatives. Intermediate goods rose 14.7% YoY to USD 14.9bn, suggesting that domestic economic activity remaining firm ahead of Lebaran festivities.
• Looking ahead, our narrower surplus could worsen, particularly if China’s 2026 GDP growth were to decelerate worse than expected, resulting in weaker exports. Additionally, we expect export growth is likely to stay moderate amid global geopolitics and commodity-price volatility. Meanwhile, import strength may persist in the near term if domestic investment and consumption remain firm. However, imports may be undermined by weaker IDR amid current flight to safety to USD on the back of the recent Iran bombing and potentially wider budget deficit on lower tax receipts.