Indonesia’s Ministry of Finance Projects Positive Export Performance Moving Forward
Indonesia’s Ministry of Finance anticipates that export performance will continue to grow. Export performance is expected to remain strong in the future, aided by high demand and prices.
US$19.16 Billion Export Increase in 2022
Exports increased by 25.31 percent year on year (US$19.16 billion) in January 2022. This positive export performance comes despite rising risks and a slowing of economic growth and global trade.
Although growth slowed compared to December 2021 due to seasonal factors, exports continued to grow strongly, indicating that the Omicron variant outbreak had little impact on production and export activities.
A Rise in Imports Too
Import performance in January 2022 also increased by 36.77 percent year on year (US$18.23 billion). This rise indicates that domestic consumption and production activities have continued to improve. Import performance in 2022 is expected to improve as the economy continues to improve.
Based on the type of use, imports of capital goods increased by 41.94 percent year on year. This was followed by imports of raw or auxiliary materials, which increased by 39.57 percent year on year, and imports of consumer goods, which increased by 10.25 percent year on year.
The rise in imports of raw materials and capital goods reflects the continued expansion of domestic industrial activity to meet domestic and export market demands. On the other hand, the rise in consumer goods imports reflects the recovery in domestic consumption activities and people’s purchasing power.
Export Performance Remains Optimistic, But Global Risks Still Anticipated
The government will continue to anticipate various global economic risks that may have an impact on Indonesia’s trade balance performance. The government will also work to overcome various structural barriers that the sector faces.
These barriers include improving logistics by accelerating infrastructure development, and simplifying various permits and licences. It also includes strengthening the National Logistic Ecosystem (NLE), and providing various facilities, such as Bonded Zone facilities (KB) and Ease of Imports for Export Purposes (KITE), and developing Special Economic Zones (KEK).
Indonesia has the potential to develop a strong iron and steel processing industry. Consistent downstreaming is one of the best ways to help strengthen industrially processed goods exports while simultaneously decreasing the dominance of oil and gas exports. Electronics, steel, and automobiles are currently Indonesia’s top exports in the category of industrially processed products.
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