Exports continued to slide in April, according to the Central Statistics Agency (BPS), but at a slower pace, suggesting a recovery is in sight as demand strengthened.
Exports in April contracted by 22.55 percent from a year earlier, slower than March's 28.87 percent drop since March 2008, BPS head Rusman Heriawan said at a press conference Monday.
Exports contracted by 32.86 percent in February from a year earlier and by 36 percent in January since January 2008.
"In April, exports, based on statistics, began to show signs of recovery," Finance Minister Sri Mulyani Indrawati said at a hearing with the House of Representatives' budget committee.
"After the first half [of 2009], exports may improve faster," she added.
Exports and imports account for less than 35 percent of Indonesia's GDP, according to the Finance Ministry. The biggest contributor is domestic consumption, which is about 60 percent of the country's GDP. The remaining driver is net investment.
But as domestic consumption may slow in the remaining three quarters this year, exports are expected to compensate to support the GDP, Mulyani said in an interview last week.
The government expects the economy to expand between 4 and 4.5 percent this year, and recover to between 5 and 6 percent in 2010 as exports pick up. The economy posted a 4.4 percent growth in the first quarter of 2009, thanks in part to the elections that helped bolster domestic demand.
Bank Indonesia's Deputy Governor Hartadi A. Sarwono said recently Indonesia’s economic growth in the second quarter and beyond would be supported by a stronger export demand, in line with an anticipated recovery trend in Asia’s largest economies, including Japan, India, China and South Korea.
Between January and April, exports slid 29.51 percent from the same period last year, according to the BPS. Indonesia sold US$31.49 billion of products, mainly to Japan, the US and Singapore.
The drop in exports was followed by a drop in imports, said Rusman.
From January to April, Indonesia bought $25.48 billion in goods, a 38.42 percent decline from the same period last year.
Indonesia imported the most from China, with $3.77 billion worth of products, the BPS reported. Japan and Singapore were in second and third position, Japan selling $2.79 billion of goods and Singapore $2.47 billion of goods to Indonesia.
Raw material imports dropped by 44.42 percent, consumer goods by 34.27 percent and capital goods by 8.68 percent, hinting companies had halted production.
According to the Finance Ministry, exports may contract by between 7 and 5 percent this year, while imports may decrease by between 9.6 and 7 percent.
The central bank's estimates are on the pessimistic side. Exports are predicted to slide between 15.4 and 14.5 percent, while imports may shrink between 16.8 and 16.5 percent.
But next year, exports are estimated to grow between 5 and 7 percent, said Mulyani.
Imports are predicted to grow by between 6.1 and 6.8 percent.
Between January and April, exports slid 29.51 percent from the same period last year.
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