Japan in Recession, Indonesia's Exports Affected

Japan is experiencing a recession, indicated by two consecutive quarters of negative economic growth in Q3 and Q4 of 2023. This appears to be impacting Indonesia's trade performance, given that Japan is a major destination for Indonesian non-oil and gas exports.

According to Indonesia's Central Bureau of Statistics (BPS), Indonesia's non-oil and gas exports to Japan reached US$18.9 billion from January to December 2023, down 18.59% compared to the same period in 2022 (cumulative-to-cumulative).

This decline continued at the beginning of this year. In January 2024, Indonesia's non-oil and gas exports to Japan were only US$1.46 billion, a decrease of 22.73% compared to January 2023 (year-on-year).

Some of Indonesia's main export commodities to Japan include mineral fuels (including coal); electrical machinery and equipment; jewelry and precious stones; nickel; wood and wood products; rubber and rubber products; and vehicles and components.

Amidst the decline in trade with Japan, the Indonesian government has stated it will focus on boosting exports to 12 other priority countries: Saudi Arabia, the Netherlands, Brazil, Chile, China, the Philippines, India, Kenya, South Korea, Mexico, the United Arab Emirates, and Vietnam.

"Priority export products range from fish and processed fish, bird's nests, coconut and processed coconut products, coffee and processed spices, vegetable materials and margarine, cocoa, processed food, and oilseed meal and animal feed," said Coordinating Minister for Economic Affairs Airlangga Hartarto, as reported by *Katadata.co.id* on Monday, February 19, 2024.