Country Risk Spotlight – Indonesia
Republik Indonesia’s recent economic performance has been lacklustre. Merchandise exports have been falling rather sharply, by a cumulative 14.0% in the first ten months of the year, owing in large part to declining commodity prices and the slowing Chinese economy. Given this, it is fortunate that Indonesian imports have declined by even more than exports (-20.5% y-o-y in the first ten months) owing to collapsing oil prices and the erosion of import purchasing power from the weaker rupiah, which has fallen by over 10% against the dollar since the start of 2015. This means that exports have been falling despite significant help from the weakening currency.