MARKET DEVELOPMENT
RI Books Another Trade Surplus in October
RI Books Another Trade Surplus in October
19/11/2015 (Jakarta Post) - Indonesia’s trade recorded another surplus in October, as imports continued to decline.
The Central Statistics Agency (BPS) announced on Monday that Indonesia booked a surplus of US$1.01 billion in October, bringing the year-to-date figure to $8.16 billion.
With the downward trend in the country’s imports, BPS head Suryamin estimated that the trade surplus would continue for the remaining two months, giving the country the chance to book a full-year trade surplus.
“We have imported quite a lot of goods to meet our needs, including those to run infrastructure projects that we have planned. I don’t think we will see massive imports in the remaining months,” he said.
BPS data shows that the country has booked a trade surplus every month since December 2014. However, the surplus did not occur due to an increase in exports, but due to weak imports, which declined significantly in recent months amid the country’s economic slowdown.
If Indonesia records a full-year trade surplus this year, it would be the first since 2011, when the surplus stood at $26.32 billion. After 2011, the country’s trade with the rest of the world remained in deficit for years, with $1.63 billion recorded in 2012, $4.06 billion in 2013 and $1.88 billion in 2014.
Primary commodities — such as crude palm oil (CPO) and rubber — could help boost exports in November and December, BPS deputy head for distribution and service statistics Sasmito Hadi Wibowo said, citing an uptick in their prices.
“They make up the largest part of our export portfolio, so if their prices climb, they will help drive exports higher, even if not to the level that we saw previously, during the commodity boom.”
Bloomberg recently reported that global commodity prices had risen after supply concerns as a result of the El Niño weather phenomenon, which damaged crops.
Meanwhile, the October surplus was marginally lower than the $1.03 billion recorded in September. According to BPS, both exports and imports fell last month. Exports declined 4 percent month-on-month (mom) to $12.08 billion, as exports of both oil and gas and non-oil and gas products were subdued.
Total exports from January to October shrank 14 percent year-on-year (yoy) to $127.22 billion. The fall in shipments was recorded for all major export destinations. For example, exports to China slumped 20.1 percent yoy, while those to the US and Japan slipped 2.9 percent and 9.5 percent yoy, respectively.
On the other hand, imports plunged deeper than exports in October, dropping 4.3 percent mom to $11.06 billion. The October result brought total imports for the year so far to $119.05 billion, a 20.5 percent decrease compared to the period of January to October 2014.
Coordinating Economic Minister Darmin Nasution noted the role that China’s economic slowdown played on Indonesian exports. “The impact is quite direct for us,” he said. “In a situation like now, we also expected the weakening rupiah to boost our exports, but unfortunately, they were not backed by the prices.”
According to Bank Mandiri economist Andry Asmoro, the latest surplus will have a positive effect domestically.
“Higher exports than imports trigger inflow of foreign currencies, taking some pressure off the rupiah,” he said.
He added that the country should remain cautious about the contraction of raw material and capital goods imports, which might signal a continuing economic slowdown.
DBS Bank economist Gundy Cahyadi warned of a deterioration in the trade balance next year. “It may mean that the current account deficit will widen again,” he wrote in an email.
The Central Statistics Agency (BPS) announced on Monday that Indonesia booked a surplus of US$1.01 billion in October, bringing the year-to-date figure to $8.16 billion.
With the downward trend in the country’s imports, BPS head Suryamin estimated that the trade surplus would continue for the remaining two months, giving the country the chance to book a full-year trade surplus.
“We have imported quite a lot of goods to meet our needs, including those to run infrastructure projects that we have planned. I don’t think we will see massive imports in the remaining months,” he said.
BPS data shows that the country has booked a trade surplus every month since December 2014. However, the surplus did not occur due to an increase in exports, but due to weak imports, which declined significantly in recent months amid the country’s economic slowdown.
If Indonesia records a full-year trade surplus this year, it would be the first since 2011, when the surplus stood at $26.32 billion. After 2011, the country’s trade with the rest of the world remained in deficit for years, with $1.63 billion recorded in 2012, $4.06 billion in 2013 and $1.88 billion in 2014.
Primary commodities — such as crude palm oil (CPO) and rubber — could help boost exports in November and December, BPS deputy head for distribution and service statistics Sasmito Hadi Wibowo said, citing an uptick in their prices.
“They make up the largest part of our export portfolio, so if their prices climb, they will help drive exports higher, even if not to the level that we saw previously, during the commodity boom.”
Bloomberg recently reported that global commodity prices had risen after supply concerns as a result of the El Niño weather phenomenon, which damaged crops.
Meanwhile, the October surplus was marginally lower than the $1.03 billion recorded in September. According to BPS, both exports and imports fell last month. Exports declined 4 percent month-on-month (mom) to $12.08 billion, as exports of both oil and gas and non-oil and gas products were subdued.
Total exports from January to October shrank 14 percent year-on-year (yoy) to $127.22 billion. The fall in shipments was recorded for all major export destinations. For example, exports to China slumped 20.1 percent yoy, while those to the US and Japan slipped 2.9 percent and 9.5 percent yoy, respectively.
On the other hand, imports plunged deeper than exports in October, dropping 4.3 percent mom to $11.06 billion. The October result brought total imports for the year so far to $119.05 billion, a 20.5 percent decrease compared to the period of January to October 2014.
Coordinating Economic Minister Darmin Nasution noted the role that China’s economic slowdown played on Indonesian exports. “The impact is quite direct for us,” he said. “In a situation like now, we also expected the weakening rupiah to boost our exports, but unfortunately, they were not backed by the prices.”
According to Bank Mandiri economist Andry Asmoro, the latest surplus will have a positive effect domestically.
“Higher exports than imports trigger inflow of foreign currencies, taking some pressure off the rupiah,” he said.
He added that the country should remain cautious about the contraction of raw material and capital goods imports, which might signal a continuing economic slowdown.
DBS Bank economist Gundy Cahyadi warned of a deterioration in the trade balance next year. “It may mean that the current account deficit will widen again,” he wrote in an email.