Jakarta. Analysts warned the government against being complacent despite getting out of its two-month trade deficit.

Indonesia recorded a $120 million surplus in July after seeing a deficit since May. Indonesia at the time lost its six-year surplus following surging oil and gas imports. 

Despite the bounceback, Bank Permata economist Faisal Rachman said that the government’s growth-oriented agenda might risk driving up imports. He went on to say that the Middle East tensions could lead to oil price hikes, which would subsequently increase the oil import price. Indonesia’s export growth is expected to moderate due to weakening global demand, persistent geopolitical, and trade policy uncertainties. Global uncertainties are expected to disrupt supply chains and prompt countries to shift to more inward-looking policies.

"Although global trade in semiconductors and AI-related chips continues to expand, Indonesia's limited involvement in these high-value supply chains means the direct benefit to its exports will likely remain limited," Faisal said. 

He projects Indonesia’s current account deficit to widen to 2.49% of gross domestic product (GDP) in 2026, exceeding the 0.09% figure seen the previous year. Foreign exchange reserves are expected to decline to $143–147 billion by the end of 2026, down from $156.47 billion at the end of 2025. 

“Under these circumstances, we anticipate that Bank Indonesia will maintain a monetary policy currently oriented toward stability,” Faisal said.

Separately, Bank Danamon chief rconomist Irman Faiz argued that external conditions remain challenging; the trade surplus recorded in July was narrow and partly bolstered by lower oil prices.

At the same time, robust investment-related imports continue to absorb a significant portion of the non-oil and gas trade buffer. Consequently, Indonesia's trade buffer is expected to remain much thinner compared to previous periods of rising commodity prices. 

“We remain cautious regarding the external outlook. Commodity prices will likely continue to provide short-term support for exports, but strong imports of capital goods are expected to persist in line with the investment cycle,” Irman said. 

Given these conditions, the current account deficit is projected to widen to approximately 1.5% of GDP in 2026.

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