Indonesia posted a surprise trade surplus last month, beating forecasts of a deficit.
Imports fell more sharply than exports amid feeble global and domestic growth, according to Statistics Indonesia (BPS).
With a US$161-million surplus in October, Indonesia’s trade balance reversed an earlier US$163-million deficit in September. From January to October, Indonesia recorded a US$1.78-billion trade deficit, compared to the US$5.6 billion recorded over the same period in 2018. Exports fell for 12 straight months, by 6.1 per cent year on year in October to US$14.9 billion. Manufacturing, which accounted for 75 per cent of exports in October, fell by 2.49 per cent year on year to US$11.3 billion.
On a monthly basis, exports increased by 6 per cent, driven by a 5-per-cent rise in shipments of manufactured goods such as cars and sports shoes.
Satria Sambijantoro, an economist at Bahana Sekuritas in Jakarta, said last month’s figures looked “impressive” amid feeble global trade and Donald Trump’s ongoing trade war with China.
“Falling exports must be seen in context. Exports had beat consensus forecast for two months in a row, driven by manufacturing exports,” he told the media.
Indonesia has looked to boost exports and to find import substitutions after 2018’s record deficit of US$8.7 billion.
Andry Asmoro, the lead economist at Bank Mandiri, said the smaller than anticipated export contraction reflected last year’s high-base figures and had little to do with government policies.
Indonesia was banking on bilateral and multilateral trade deals to revive non-oil exports within five years, according to Trade Minister Agus Suparmanto. Indonesia’s exports would rise through improved access to overseas markets and lower import tariffs achieved through trade concessions, the minister said. Indonesia is in the process of agreeing at least 11 trade deals and plans to ratify 13 other agreements by 2025.
The ministry has forecast rises in non-oil and gas exports between 7 and 12 per cent by 2024. “I think the target is realistic amid the global economic slowdown,” Agus said in Jakarta.
Indonesia has allowed nine companies to resume nickel-ore exports after probes into alleged violations of ore export rules, said Heru Pambudi, director-general of Jakarta’s customs office.
Among the firms allowed to export ore again are state-run PT Aneka Tambang and PT Trimegah Bangun Persada.
Indonesia is the world’s biggest nickel-ore exporter. It halted shipments on October 28 following a surge in exports after a ban on exports was enforced two years early in January.
Surabaya. Picture credit: Flickr
