Indonesia’s trade figures for the first four months of this year show manufacturing companies were absorbing more imported raw materials and capital goods to support their growing production volume.
Imports of raw materials in the January-April period reached US$30.17 billion, up by 64.36 percent from $18.36 billion in the same period last year. Meanwhile, capital goods imports hit $8.2 billion, a 46.67 percent increase from $5.6 billion over the first four months of last year.
Based on these figures, imports of raw materials reached 72.7 percent of Indonesia’s total imports in the first four months, coupled with capital goods that contributed 19.8 percent and 7.5 percent of consumer goods.
Indonesia’s non-oil and gas imports surged by 60.83 percent to $41.5 billion in the first four months of the year from $25.8 billion in the same period of 2009 on the back of an increase in realized investments, said Deputy Trade Minister Mahendra Siregar.
“The higher imports especially of raw materials and capital goods conform to the growing realization of investments,” he told reporters last week.
Mahendra said the drastic increase of non-oil and gas imports was not a concern because most were used by domestic manufacturers to increase production, and would later trigger higher exports, stronger economic growth and job creation.
Chatib Basri, an economist at the University of Indonesia, said the jump in imports would lead to an expansion of investment.
“I’m always happy with the growing imports since 92 percent of our imports consist of raw materials and capital goods,” he told The Jakarta Post by phone Saturday.
He said the growing imports of raw materials, as a consequence of strong exports of manufactured products, would gradually increase imports of capital goods leading to production capacity expansions.
Apart from imports, Indonesia’s exports and overall trade balance also showed strong performances during the last quarter of 2009 to the first quarter of 2010 and also in April.
According to the Trade Ministry, Indonesia’s trade volume reached $23.6 billion in April with a surplus worth $527.5 million, bringing the January-April trade surplus to $6.1 billion, which is a 7.2 percent increase compared to the same period in 2009.
Mahendra said Indonesia’s surplus could be broken down into a non-oil and gas surplus worth $6.2 billion and an oil and gas deficit worth $0.1 billion.
“It gives a positive sign for our economic growth, which is strongly supported by exports and investment and is not merely reliant on public consumption and government spending,” he said, adding that this year’s healthier economic growth hopefully could be maintained.
However, he said, this year’s economic growth would be challenged by the ongoing European debt crisis. “So the question is whether our improved trade performances can continue amid difficult situations,” he said. (ebf)
