The export performance of Indonesia was very strong in June 2025 as the shipments increased by 11.29 percentage points compared to June last year. The growth in exports in the Southeast Asian country hit 23.44 billion dollars with a surprise growth of 10.41% over expectations of economists and continuing upon the strong performance in May that recorded a growth of 9.68%.
The massive results of Indonesia’s exports can be explained by the fact that companies tried to get the goods to the United States before the new tariff deadline appeared. This wise timing contributed to a very big increase in the trade performance of the country.
Indonesia Export Growth Driven by US-Bound Shipments
The boom of the Indonesian exports was heavily driven by a huge increase of 33.5 percent in non-oil and gas exports to the United States. The Indonesian exporters informed that they sped up their delivery schedules to meet the deadline issued by President Trump, which was August 1, to negotiate tariffs, and this resulted in a significant increase in the overall volumes of exports.
Some of the significant products that contribute to this growth in Indonesia’s exports include electrical machinery, clothing, footwear, palm oil, rubber, and seafood. In June, palm oil exports increased alone by 15.1 percent, and gold and jewelry exports more than doubled in June 2024, with a decrease in June 2024.
The United States and Indonesia have just agreed in what was a trade agreement reducing the import tariff charged, as previously threatened to be 32% to a lower tariff of 19%. Indonesia, under this deal, was expected to abolish a majority of the tariffs on industrial and agricultural products of the US as well as to increase the number of American goods bought.
Read Also: US Finalises Major Trade Agreements with EU, Japan, ASEAN Nations
Trade Surplus and Economic Outlook Amid Export Growth
Powerful exports led to Indonesia experiencing a trade surplus of 4.11 billion in June, as opposed to expectations of 3.45 billion amongst analysts. Import also grew by 4.28 percent to reach 19.33 billion dollars, yet the rate was less than the expected 6.5 percent, hence keeping the trade healthy.
Nevertheless, the momentum in export-driven by Indonesia has given some warning to the economists. Bank Danamon economist Hosianna Situmorang pointed out that the surplus in trade might get small as new tariffs come into effect, and this may decrease export competitiveness and increase imports.
At the domestic level, Indonesia’s July inflation rate increased to 2.37 percent year on year, but it is a little bit higher than the forecast of 2.25 percent. This rise was contributed to by an increase in higher food prices, especially shallots, rice, and tomatoes, and the high cost of utilities and education.
Even with these obstacles, the analysts are still bullish on the future of the economy of Indonesia. Given the growth in Indonesia’s exports, and inflation on pace with the target margin of the central bank of 1.5per cent to 3.5per cent, there is the anticipation of more interest rate reductions in 2025.
Bank Permata economist Josua Pardede opined that as much as 50 basis points of cuts might be imposed, whereby the current account deficit has not been ripping it off despite the issue of tariffs on the trade patterns.
