Economic Slowdown Presses Export Performance

DOKUMENTASI KARANTINA PERTANIAN LAMPUNG

Departure activity for export of agricultural commodities at Panjang Port, Lampung, on Saturday (14/8/2021).

JAKARTA, KOMPAS — Indonesia's export performance in September 2022 fell 10.99 percent on a monthly basis, due to the economic slowdown in a number of major destination countries and the decline in global commodities prices.

Statistics Indonesia (BPS) noted that Indonesia's export value in September reached US$24.8 billion, down 10.99 percent month-to-month (mtm). Non-oil and gas exports, which accounted for 94.66 percent of total exports, also fell 10.31 percent mtm to $23.48 billion.

The BPS’s distribution statistics and services deputy, Setianto, told a press conference in Jakarta on Monday (17/10/2022) that the decline in export value was due to a decline in the exports of leading commodities, namely iron steel and crude palm oil (CPO). The decline in overall exports was also due to a decline in demand and commodities prices in the global market.

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In September, global CPO prices fell 11.37 percent mtm and 23.03 percent on an annual basis to $909.32 per tonne. Indonesia's CPO export volume fell from 3.6 million tonnes in August 2022 to 2.55 million tonnes in September. The price of steel also fell, from $108.85 per tonne to $99.8 per tonne, while its export volume fell from 1.35 million tonnes to 1.26 million tonnes.

Only the price and export volume of coal remained high. Coal prices in September was recorded at $321.5 per tonne, up from $290 per tonne the previous month. Coal exports increased in volume from 32.8 million tonnes to 33.2 million tonnes. "This was supported by an increase in demand from China and a number of countries in Europe that are experiencing an energy crisis due to the Russia-Ukraine war," said Setianto.

Coal exports to Europe in July-September also rose significantly, from $95.66 million to $161.69 million.

Coal exports to China rose 41.19 percent from $672.19 million in August to $949.08 million in September. Coal exports to Europe in July-September also rose significantly, from $95.66 million to $161.69 million.

PT Bank Danamon Indonesia Tbk economist Irman Faiz believed that the decline in Indonesia's export performance was influenced not only by the decline in global commodity prices, and that the economic slowdown in major export destination countries, such as the United States and China, also had a major impact.

According to BPS data, the value of Indonesian exports to the European Union in August-September fell 21.47 percent, while exports to India fell 29.23 percent, to the United States minus 18.26 percent, to Japan minus 2.53 percent, and to China minus 0. 09 percent.

According to Irman, this situation would continue to affect Indonesia's export performance until next year. However, Indonesia's year-end trade balance would remain in a surplus and contribute to maintaining the rupiah exchange rate.

During the January-September period, Indonesia recorded a trade surplus of $39.87 billion.

Economic slowdown

The International Monetary Fund (IMF) estimated that China's economy will grow 3.2 percent in and 4.4 percent in 2023, far below the 8.1 percent growth in 2021.

KOMPAS/COKORDA YUDISTIRA

The first export of various furniture from Bali to Vanuatu through Benoa Harbor, Denpasar City, was inaugurated at a ceremony in the Benoa Harbor area, Denpasar City, on Tuesday (16/8/2022).

The US economy was also expected to grow 1.6 percent this year and 1 percent in 2023, down from 5.7 percent growth in 2021. The European economy was estimated to grow respectively 3.1 percent and 0.5 percent in 2022 and 2023, far below economic growth of 5.2 percent in 2021.

The World Trade Organization (WTO) has projected that global trade will experience considerable shock next year due to the economic burden of countries around the world. In 2023, the global trade volume is projected to only just 1 percent, down from the previous estimate of 3.4 percent.

WTO director general Ngozi Okonjo-Iweala said import demand would weaken as growth in major economies slowed due to various factors. (HEN)

(This article was translated by Hyginus Hardoyo)