Stability into the election
Indonesia's general election is already around the corner—it will be held on February 14, 2024. The incumbent, President Joko Widodo, is ineligible to run for a third time, based on the Indonesian Constitution. The presidential candidates for the current election are former Governor of Metropolitan Jakarta Anies Baswedan, current Defense Minister and two-time presidential candidate Prabowo Subiyanto, and former Governor of Central Java Ganjar Pranowo.
The race is very tight, and unfortunately it is very difficult to find credible sources of information on the race. Therefore, it is also difficult to predict with high certainty whether the election will be two rounds or just one round. One candidate claimed that he will win the election in one round but so far there is no credible data to support this claim.
One thing that needs to be noted is the relative stability in the country prior to the election date. So far there have been no significant security incidents in anticipation of the election date. At the same time, the Indonesian economy is also doing relatively well, with inflation under control and economic activity continuing to show significant progress. We will see the quarterly economic data one week before the election date.
In the midst of these political events, the Central Board of Statistics reported that the trade balance for December 2023 resulted in a large surplus, above that of November. Exports in December were $22,413.9 million while imports reached $19,106.7 million, bringing the trade surplus for December to $3,307.2 million, compared to $2,411.7 million in November.
Cumulative exports for full-year 2023 reached $258,881.9 million while cumulative imports for the same period reached $221,885.7 million. Therefore, the surplus for full-year 2023 was $36,933.2 million. This is a very large surplus, although it is below the surplus of the previous year, which reached $54,457.2 million. A notable development was the achievement in 2023 of a trade surplus with China for the first time ever.
The Central Board of Statistics also reported the Consumer Price Index for December 2023. Month-on-month inflation in December was 0.41%, leading Y/Y inflation to 2.61%, a level at the lower part of the Central Bank's inflation target corridor. Given that inflation situation, Bank Indonesia decided to keep the benchmark interest rate constant at 6% at its January 2024 meeting.
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