Indonesia Trade in Focus: Shrinking Surplus and Inflation Pressures Toward 2026

Indonesia’s economic performance in late 2025 revealed a more complex picture than earlier in the year. While the country continued to post a trade surplus, the figure came in smaller than expected, driven by slowing exports and a gradual uptick in inflation.

These developments highlight the growing challenges facing policymakers as Indonesia enters 2026—balancing growth, price stability, and global uncertainty.

Trade Surplus Narrows as Export Momentum Slows

Indonesia has benefited from strong trade performance in recent years, supported by commodity exports and global demand. However, toward the end of 2025, export growth began to cool.

Several factors contributed to this slowdown:

• Weaker global demand in key markets

• Softening commodity prices

• Increased competition in regional trade

As a result, Indonesia’s trade surplus remained positive but fell short of expectations, signaling a shift from the exceptional gains seen earlier.

Inflation Ticks Up—but Remains Under Control

At the same time, inflation showed signs of rising, driven by:

• Higher food prices

• Energy-related costs

• Seasonal demand pressures

Importantly, inflation levels remained within the central bank’s target range, suggesting that price pressures, while present, are not yet destabilizing. This gives policymakers some room to maneuver—but not without caution.

Policy Challenges Ahead

The combination of a narrowing trade surplus and rising inflation presents a familiar policy dilemma:

• Supporting economic growth without fueling inflation

• Managing currency stability amid changing trade dynamics

• Maintaining investor confidence in a volatile global environment

Authorities may need to adopt a more measured approach in 2026, balancing monetary discipline with targeted support for exports and domestic demand.

What This Means for 2026

Indonesia’s late-2025 data suggests a transition period rather than a crisis. The economy remains resilient, but the era of easy gains from strong global demand may be fading.

Key areas to watch in 2026 include:

• Export diversification beyond commodities

• Inflation trends and consumer purchasing power

• Policy coordination between fiscal and monetary authorities

Indonesia’s trade and inflation data tell a story of moderation—not weakness. As growth normalizes and price pressures emerge, the focus for 2026 will be on careful policy calibration to sustain stability while adapting to a more challenging global backdrop.

For investors, businesses, and policymakers alike, Indonesia’s economic journey remains one to watch closely.

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