A narrower June trade deficit and softer July inflation offered some relief, even as import growth, rupiah pressure and weaker Chinese demand kept Indonesia's outlook fragile.
Indonesia posted a second consecutive monthly trade deficit in June 2026, but the shortfall narrowed to USD 450 million from USD 1.61 billion in May and was smaller than the USD 790 million deficit forecast in a Reuters poll. Exports rose 8.84% year-on-year to USD 25.46 billion, beating expectations as stronger shipments of nickel products and palm oil-related goods helped offset a broad-based import surge. Imports climbed 34.27% to USD 25.91 billion, with oil and gas purchases jumping 105.15%. Separate data showed annual inflation eased to 2.88% in July from 3.34% in June, below the 3.20% median forecast and within Bank Indonesia's 1.5% to 3.5% target range. Core inflation held at 2.76%. Economists said lower food prices during the peak harvest season drove the cooling, though they warned that slowing growth in China, elevated import costs, potential El Nino-related food pressures, Middle East energy risks and currency weakness could keep Indonesia's external and inflation outlook under strain. Bank Indonesia's benchmark policy rate stands at 5.75% after 100 basis points of tightening since May to support the rupiah and keep inflation within target until 2027.