Analysis of the Effect of Exchange Rates, Inflation, Interest Rates, and Gross Domestic Product on the Balance of Trade in Indonesia

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Analysis shows trade balance in Indonesia is influenced by inflation and interest rates, indicating potential economic policy considerations.

In the long term, inflation, interest rates, and gross domestic product significantly affect Indonesia's trade balance.
Short-term analysis reveals that exchange rates, inflation, interest rates, and gross domestic product have no significant effect on the trade balance.
The study employs an Error Correction Model (ECM) to analyze economic indicators over a span from January 2014 to December 2023.
Findings suggest economic policymakers should focus on long-term strategies to address inflation and interest rates for trade balance improvement.

Subiyanto et al. (2025) studied this question.

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Analysis shows trade balance in Indonesia is influenced by inflation and interest rates, indicating potential economic policy considerations.