Indonesia is projected to maintain its trade surplus in July 2024, marking the 51st consecutive month of surplus since May 2020. Market consensus estimates the surplus will reach USD 2.5 billion, an increase from June 2024's surplus of USD 3.39 billion. This positive outlook is largely attributed to the significant rise in coal prices, which increased by 6.15% from USD 133.2 per ton at the end of June to USD 141.4 per ton by the end of July 2024. The average coal price for July was also higher at USD 137.63 per ton, compared to June's average of USD 135.1 per ton. The expected interest rate cuts by the U.S. Federal Reserve in September 2024 have contributed to this increase, making USD-denominated coal more affordable for foreign buyers, thereby boosting demand.
Despite the overall positive surplus projection, there are concerns about a potential decline in annual coal export values due to lower prices and reduced demand from key importers such as India and China. Additionally, nickel exports are expected to decrease significantly due to oversupply and a corresponding drop in prices. Economic experts offer varying surplus estimates, with predictions ranging from USD 1.3 billion to USD 2.5 billion, influenced by factors such as the Purchasing Managers' Index (PMI) contraction and the appreciation of the IDR against the USD, which could negatively impact exports. The IDR strengthened by 0.7% against the USD in July, closing at IDR 16,255/USD on July 31, 2024.
