Prepare mentally, RI recession is not an expensive one

Jakarta, CNBC Indonesia – International trade data for the July 2020 period brings a mixed aura. On the one hand, there is good news but on the other hand there are still concerns that the Indonesian economy could fall into the brink of recession.

Let’s start with the good news first. The Central Statistics Agency (BPS) reported that the export value in July was US $ 13.73 billion. Soaring 14.43% compared to the previous month (month-to-month/MtM).

Compared to the same period in 2019 (year-on-year/ YoY), exports still contracted (negative growth) -9.9%. However this is more gentle than market expectations.

The market consensus gathered by CNBC Indonesia estimates that exports will contract by -18.205% YoY. Meanwhile, the consensus version of Reuters is at -16.55% YoY.

This data shows that Indonesia’s export performance continues to improve. After touching the ‘hellish crust’ in May, exports continued to be in a positive trend.

“Monthly exports show encouraging progress. We certainly hope that in the future there will continue to be an increase,” said Suhariyanto, Head of BPS.

When exports continue to show signs of improvement, there is hope output the economy as a whole or Gross Domestic Product (GDP) has also improved. As an illustration, exports have contributed an average of 18.61% to GDP in the last 10 years.

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