• Indonesias trade balance posted a deficit of USD 0.45 Bn in Jun-26, recovering from the USD 1.61 Bn shortfall the month before. This was due to a recovery in exports after a sharp drop the previous month, while imports remained relatively stable.
• The main contributor to this surprising export growth (9.72% MoM) was fat and vegetable oil (63.56% MoM), consistent with stronger overall exports to importing countries such as India (41.77% MoM) and the US (20.56% MoM). Beyond demand factors, uncertainties might also be one reason for producers to accelerate exports. Growth in other commodities like mineral fuels (7.26% MoM) and nickel (1.36% MoM) also remained relatively solid.
• Imports grew at a slower pace (4.41% MoM), with one of the drags coming from iron and steel imports (-18.39% MoM). Demand for these commodities gradually normalized after peaking in Apr-26, likely linked to the acceleration of a government program. On the other hand, the decline in the manufacturing PMI (46.9) in June also somewhat reduced import potential for the month.
• Notably, on a year-on-year basis, imports in the raw materials (38.94% YoY) and capital goods (26.53% YoY) categories not only grew strongly but also accelerated compared to the previous month. This indicates that investment might prove to be one of the main drivers of Q2-26 GDP growth on August 5th, stemming from government programs.
• In the long term, export potential is still overshadowed by global pressures such as rising yields and economic slowdowns. However, some catalysts might lessen the effects of those risks, such as potential stimulus from China and a rotation from AI to other sectors could, via Tobins Q, incentivize investment in real sectors globally, thereby increasing demand for Indonesian exports. Another wild card is Kevin Warsh and his new Fed regime, where one if scenario could further weaken the DXY, which is generally good for commodity prices.
• The question remains how the continuity of fiscal and monetary policies, following the leadership transition in Bank Indonesia, will align with the current global calculus. If current trends are an early indication, imports supported by government programs will likely continue, while energy price pressures will also persist, leading us to still predict a deeper current account deficit in FY2026 compared to the previous year.

Versi lengkap report ini (dan report sebelumnya) dapat diakses lewat link berikut: https://s.id/BCA_REI