Indonesia's Exports Face Challenges in February 2024

While Indonesia's largest export markets showed a decline, there are bright spots in the February 2024 data. Increases in exports to countries like the US and Germany highlight the importance of diversifying trade relationships. Discover more in our export market breakdown.

Indonesia's Exports Face Challenges in February 2024

The latest figures from the Indonesian Central Bureau of Statistics illustrate a slowdown in the country's export performance in February 2024. Let's break down what contributed to this decline and what it means for the Indonesian economy.

Key Takeaways

  • Indonesia's overall exports in February 2024 reached US$19.31 billion, a decrease of 5.79% compared to January 2024 and a 9.45% drop from February 2023.
  • Exports in both oil and gas and non-oil and gas sectors declined from previous periods.
  • Non-oil and gas exports were down 5.27% from January 2024 and decreased 10.15% from February 2023.
  • China, the United States, and India remain Indonesia's largest export partners.
  • Manufacturing exports took a hit, while agriculture, forestry, and fisheries saw a slight uptick.

Understanding the Decline

Several factors likely contributed to the decline in Indonesian exports:

  • Global Economic Conditions: A weaker global economy may be reducing demand for Indonesian goods. Additionally, disruptions in shipping lanes and uncertainty in the global supply chain could be causing hesitancy among buyers.
  • Declining Commodity Prices: The falling prices of key export commodities like iron and steel, and animal/vegetable fats may be negatively impacting export value.
  • Internal Production Challenges: Indonesia may be experiencing some production bottlenecks that limit the volume of goods available for export, especially in the manufacturing sector.

Focus on Non-Oil and Gas Exports

The Indonesian government consistently prioritizes boosting non-oil and gas exports. Here's how the sector performed in February 2024:

  • Exports to China, while still the largest market, decreased. This highlights Indonesia's need to diversify its export markets.
  • Increases in exports to countries like the US, Malaysia, and Germany are promising signs.
  • Iron and steel exports saw a significant decline, indicating a need to focus on higher-value manufacturing sectors.

The Way Forward

The Indonesian government has several options to address the export slowdown:

  • Market Diversification: Continue efforts to reduce reliance on a few large markets. Increased presence in less saturated markets could stabilize export income.
  • Value-Added Production: Focus on manufacturing finished goods rather than simply exporting raw materials. This commands higher prices and strengthens Indonesia's position in the global market.
  • Trade Facilitation: Streamline trade regulations and procedures to reduce delays and costs for exporters, making them more competitive.

Conclusion

While the February 2024 export figures raise concerns, it's important to view them within the larger context of fluctuating global markets. Indonesia has considerable potential to boost its export performance, and with strategic adjustments, its position in the international trade arena can be strengthened.