Sept. exports fall 6 percent due to Ramadan fasting month

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Tue, 11/03/2009 1:05 PM  |  Headlines

The country's exports faltered in September as business activities slowed down in the fasting month of Ramadan, according to the Central Statistics Agency (BPS).

After exports surpassed US$10 billion for the first time this year in August, they dropped 6.75 percent to $9.83 billion, BPS head Rusman Heriawan said in a press conference Monday.

A year-on-year analysis showed that exports in September dropped 19.92 percent compared to a year earlier. Between January and September this year, exports dropped 25.57 percent to $80.13 billion compared to the same period in 2008.

"Mining products helped cushion the fall," said Rusman, adding that coal made up the bulk of these products.

Indonesia exported 157.9 million tons of coal in the first nine months this year, a 2.93 percent increase from 153.4 million tons sold in the same period last year, he said.

Non-oil-and-gas exports in September dropped 8.58 percent to $8.13 billion from the previous month. In the first nine months this year non-oil-and-gas exports reached $68.11 billion, down 18.21 percent from the same period in 2008.

In September, Japan, the US, and China were the biggest buyers of Indonesian non-oil-and-gas products, spending $1.09 billion, $850.4 million and $704.3 million, respectively.

Despite slowing exports, Indonesia still recorded a trade surplus of $11.8 billion in the first nine months this year. Imports between January and September reached $68.33 billion.

Imports in September reached $8.56 billion, down 11.79 percent from October. Imports were still dominated by raw materials (38.73 percent), followed by consumer goods (28.17 percent) and capital goods (4.08 percent).

Non-oil-and-gas imports in September stood at $6.19 billion, while reaching $55.19 billion between January and September.

In the first nine months this year, Indonesia imported mostly from China ($9.48 billion, or 17.18 percent of imports), Japan ($6.89 billion, 12.48 percent) and Singapore ($6.85 billion, 12.4 percent).

BPS also recorded that inflation in October eased from a month earlier, giving the central bank space to maintain its benchmark interest rate. Inflation rose 2.57 percent from a year earlier.

In September year-on-year inflation stood at 2.83 percent.

Between January and October inflation reached 2.48 percent. "This year's inflation will likely be below the government's target *of 4.5 percent*," Rusman Heriawan said.

The monthly inflation of 0.19 percent in October was mainly attributed to the increasing price of processed foods, beverages and cigarettes. Surprisingly, the price of transportation, communication and financial services dropped.

Bank Indonesia (BI) may decide to maintain its benchmark rate at its collegial meeting on Thursday, analysts said.

"We think BI will keep its monetary policy language *neutral' and avert signaling any signs of an exit strategy in its upcoming monetary policy meeting. We don't expect hints of hawkishness until early next year," Citi analyst Johanna Chua said in a statement, forecasting 3.8 percent inflation by year's end.

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