• Indonesia’s trade balance rebounded to a surplus of USD 0.12 Bn in Jul-26, recovering from a USD 0.45 Bn deficit in the previous month. This reversal was driven by export growth (2.98% MoM) that outpaced a marginal increase in imports (0.72% MoM).
• The export recovery was primarily supported by non-O&G demand (4.25% MoM), particularly in iron and steel (18.27% MoM), electrical machinery (15.97% MoM), and chemical products (13.38% MoM). Conversely, three main categories acted as drags on overall export performance. Vegetable fats and oils declined (-6.21% MoM), likely reflecting the reallocation of CPO for the domestic B50 mandate or production disruptions caused by the El Niño season. Furthermore, nickel exports plummeted (-38.25% MoM) following a halt in shipments by significant exporters, while precious metals saw a sharp contraction (-45.07% MoM) due to seasonality effects.
• Meanwhile, overall imports grew at a slower pace. Oil & gas imports recorded a significant monthly decline (-17.33% MoM). This was potentially driven more by price normalization rather than lower import volumes, although the magnitude of the contraction outpaced the moderation in global energy prices.
• Within the non-O&G segment, import contractions were recorded in mechanical machinery (-5.40% MoM), plastic products (-11.86% MoM), and vehicles and parts (-1.16% MoM). However, these declines were effectively offset by robust expansions in electrical machinery (7.73% MoM) and iron and steel (27.21% MoM), possibly signaling recovering investments as PMI bounced back to 50.2 in Jul-26.
• On a year-on-year basis, all three broad import categories accelerated, with raw materials notably surging by 32.33% YoY. This could possibly be driven by the accelerated construction of the Red White Cooperatives, aligning with the government’s report of 15,000 finished units by mid-July.
• Looking ahead, the current trade momentum remains fragile. Despite questions regarding its practicality, the official formation of PT DSI’s board in late Aug-26 signals that its implementation may be imminent. The Kalimantan forest fires also pose a significant downside risk to near-term exports, threatening to disrupt both commodity production and trade logistics. Current global conditions are also relatively unfavorable for exports, with sharply rising long-term yields in many countries, including the US, indicating tightening liquidity.
• Import demand prospects appear stable, underpinned by the government’s target of operationalizing 30,000 cooperatives by the end of 2026. However, the robust spending momentum observed in the first half of the year typically precedes a deceleration in the second half, which could ultimately temper overall import growth going forward. Overall, considering the trade balance outlook and market expectations for a Fed hike this year, we still see a possibility that BI will implement one more rate hike this year.

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