Economist Says Indonesia's Export Weakness Concentrated in a Few Commodities, Check the Data

Economist at the Center of Reform on Economics (CORE) Indonesia, Yusuf Rendy Manilet, assesses that the foundation of Indonesian exports remains quite strong even though the value of non-oil and gas exports contracted by 4.5 percent year-on-year in May 2026. Yusuf believes the weakness was influenced more by a decline in certain commodities, while cumulative export performance still recorded growth. He explained that the source of pressure on non-oil and gas exports in May 2026 was concentrated in a few main commodities, rather than indicating a broad-based weakening. “If we dissect the 4.5 percent contraction in non-oil and gas exports in May 2026, the source of the pressure is actually quite concentrated and not a weakening occurring across almost all commodities,” Yusuf said on Friday, 3 July 2026. Statistics Indonesia (BPS) reported that the value of Indonesia’s exports in May 2026 reached US$23.2 billion, a drop of 5.73 percent compared to the same period last year. This weakness was primarily triggered by a decline in non-oil and gas exports. The value of non-oil and gas exports reached US$22.45 billion, a contraction of 4.5 percent compared to May 2025. In April 2026, the value of Indonesian exports was recorded at US$25.30 billion, growing by 21.98 percent. By commodity, the largest decline in non-oil and gas exports in May 2026 came from exports of precious metals, jewellery, and gems, which fell by 59.35 percent, contributing a negative share of approximately 2.93 percent to non-oil and gas export performance. In addition, exports of metal ores, slag, and ash plummeted by 99.25 percent, while exports of iron and steel fell by 14.68 percent. According to Yusuf, the decline in metal ore exports is a consequence of government policy, which prohibits the export of raw materials as part of efforts to encourage downstream processing. “So this is more a consequence of policy rather than a signal of weakening export competitiveness,” Yusuf stated. Meanwhile, the correction in precious metal exports, he said, was influenced by the normalisation of gold prices after a very high rally the previous year, making the base effect less favourable. Yusuf added that the weakening of iron and steel exports is still triggered by the lack of recovery in demand from China, especially due to the weak property and construction sectors in that country. He added that the US reciprocal tariff of 19 percent is beginning to add pressure to Indonesian exports. However, Yusuf assessed that the impact so far has been felt more by the textile, footwear, and electronics industries, and is therefore not yet the main cause of the non-oil and gas export weakness in May.