Smoothing out the transition process
The Indonesian government is currently experiencing a lengthy and smooth transition period from the Joko Widodo presidency to that of the new leader, the incoming President Prabowo Subiyanto. During this period, the two leaders have seemed to show a deep understanding as to how to move the hand-over process forward more efficiently. One move that was highly appreciated was the installation of three new vice ministers to the cabinet of current President Joko Widodo.
The installation of these three vice ministers has served as a good learning period for the incoming government, so that the transition to the new government can be expected to be smoother, helping speed up the adjustment between the two governments. It is certainly a luxury for the new government to have this kind of process, and it demonstrates the strong support by President Joko Widodo of the incoming President Prabowo.
The installation of Thomas Djiwandono as the new Vice Minister of Finance is expected to give some relief to the business and investors community. Thomas Djiwandono is the son of the former Central Bank Governor and is known to be a person of good character. Whether he or another person will be the next Minister of Finance to replace the well-known Sri Mulyani, the transition process is certainly a very useful period
In the midst of this period of transition, Indonesia's Central Board of Statistics released its balance of trade Report for June 2024. The trade balance was reported at another surplus, although smaller than that of the previous month. The surplus in June was $2,389.7 million compared to the $2,924.9 million achieved in May. The total trade surplus for the first six months of 2024 stood at $15,455.4 million, 22.43 % lower than the $19,912.3 million achieved in the same period of the previous year.
Exports in June reached $20,840.6 million while imports were $18,450.9 million. Cumulative exports from January to June reached $125,087.2 million, while cumulative imports for the same period reached $109,641.8 million.
The Central Board of Statistics also reported the Consumer Price Index for June, which registered deflation of 0.08%. With that monthly rate, Y/Y inflation in June reached 2.51%, a level slightly above the mid-point of the inflation corridor administered by the Central Bank. Against that background, Bank Indonesia kept the benchmark rate constant at 6.25% in its policy meeting held on July 21, 2024.
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