Indonesia Investments Report – September 2023 Edition
9 October 2023 (closed)
Jakarta Composite Index (6,891.46)  +2.94  +0.04%
GDP Growth Q2-2023 5.17% (y/y)
Inflation September 2023 2.28% (y/y)
Central Bank BI 7-Day Reverse Repo September 2023 5.75%
Indonesia posted a strong USD $3.12 billion trade surplus in August 2023. It is the 40th consecutive month of trade surpluses for Southeast Asia’s biggest economy, an indication that global commodity prices (particularly coal and palm oil, which are the key non-oil and gas export items of Indonesia) remain at lucrative levels.
In sum, Indonesian exports rebounded on a month-on-month basis, but remain well below the export levels we saw one year ago (as global commodity prices have been normalizing, while there is also some global economic weakness that undermines overseas demand). Meanwhile, Indonesian imports fell on a month-on-month basis, and are also well below import levels we saw one year earlier. Below, we are going to zoom in on Indonesia’s export and import data. But first –as usual– we take a look at global trade.
International Trade
China’s exports declined 8.8 percent year-on-year (y/y) in August 2023 (after a 14.5 percent contraction in the preceding month), while its imports fell 7.3 percent (y/y) over the same period (after a 12.4 percent contraction in the preceding month). And so, after a short post-COVID-19-crisis recovery, China’s economy still seems to be a bit fragile, particularly as a consequence of its property downturn (it is estimated in international media coverage that around 70 percent of household wealth in China is tied up in the property market). Meanwhile, China is also being burdened by rising youth unemployment as well as weak consumption. Regarding the latter, it will be interesting to see to what extend the coming Mid-Autumn Festival and National Day holidays (which last eight days starting from 29 September 2023) are able to boost demand. Typically, these celebrations form a peak season for consumption.
The government of China set a target for economic growth at the level of around 5.0 percent (y/y) in 2023. However, most analysts seem to expect lower growth for the world’s second-biggest economy this year as outlooks have become a bit pessimistic.

Japan’s exports slid 0.8 percent (y/y) in August 2023, and what is quite noticeable is that Japanese exports to Asia particularly contracted (-8.8 percent y/y). Japanese exports to China even slid 11 percent (y/y). In late-August 2023, China announced that it was suspending seafood imports from Japan after treated radioactive water (from the wrecked Fukushima Dai-ichi nuclear plant in northern Japan) began to be released into the Pacific Ocean. However, while this does indeed impact on Japan’s export performance in September 2023 (and beyond), Japan’s overall export of food to China accounted for only a 1 percentage share of the total. And so, the reason for the decline in shipments to China needs to be found somewhere else. Most likely, it is China’s weaker-than-expected economic recovery that is weighing on shipments from Japan. Of the shipments to China, mineral fuel fell 64.3 percent, alongside a 27.8 percent slide in steel, and a 25.5 percent drop in electric measuring equipment.
Meanwhile, Japan also restricts exports of advanced chip-manufacturing equipment to China (imposed in July 2023) after the United States requested this (fearing China would become able of developing its own high-end semiconductors, for example for use in military purposes).
This is the introduction of the article. The full September 2023 report (an electronic report) can be ordered by sending an email or WhatsApp message to:
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