The first trade deficit in years
Indonesia's economy during June and the first part of July 2026 was marked by the announcement of the country's first trade deficit (for May) in years and a weakening exchange rate. The trade deficit was mostly due to a decline in exports, while imports also fell M/M, but at a slower rate.
Meanwhile, the weakening exchange rate was in large part due to a decline in trust by foreign investors because of the lack of transparency of the Indonesian stock market as well as a lack of coherence regarding the Indonesian government’s strategic programs. In order to keep the exchange rate at a manageable level, the Central Bank of Indonesia increased its benchmark rate twice in June, on June 9 and June 18, each by 25 basis points.
As mentioned, the Central Board of Statistics released its balance of trade report for May 2026, which showed a deficit of $1,610.2 million compared to a surplus of $89.1 million in April. This was the first trade deficit since April 2020. The total trade balance for the first five months of 2026 was a surplus of $4,027.4 million, a massive 73.81% lower than the $15,375.2 million surplus achieved in the same period of the previous year.
Exports in May 2026 reached $23,203.5 million while imports reached $24,813.7 million. Cumulative exports from January to May 2026 were $115,355.5 million compared with cumulative exports for the year-ago period of $111,977.4 million. However, total imports in the first five months in 2026 reached $111,328.1 million, a sharp increase compared to the previous year’s value of $96,602.2 million.
The Central Board of Statistics also reported the Consumer Price Index for the month of June 2026, which resulted in inflation of 0.44%. With that monthly inflation, Y/Y inflation in June 2026 reached 3.34%, a level close to the ceiling of the Central Bank's target inflation corridor.
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