G

lobal demand for Indonesian goods rose 37.5 percent in the first nine months of this year, but exports to the ailing US and Europe slowed in September.

The Central Statistics Agency (BPS) said on Tuesday that from January to September, total export value reached US$152.5 billion, on track to achieve the government’s $200 billion target for all of 2011 thanks to a commodities boom driven mainly by coal and crude palm oil (CPO). Indonesia is the world’s largest exporter of both.

However, September’s exports of $17.8 billion — supported by Chinese and Japanese demand — recorded a 4.5 percent decline from August, said Djamal, BPS deputy chairman for distribution and service statistics.

“There are a lot of factors [for weaker month-to-month exports]; mainly a decline in exports for the US and European nations affected by the crisis amid fiscal and debt woes,” he said.

Demand from 27 EU countries dropped 28 percent to $1.4 billion in September, while in the same period Indonesian exports to the US fell 14.4 percent to $1.2 billion.

While US and European demand for Indonesian goods cumulatively accounted for over 20 percent of the nation’s overall export value, authorities feared a second-round effect that would impact demands from larger export destinations such as China and Southeast Asian nations.

Deddy Saleh, the Trade Ministry’s director general for foreign trade, expected the global economic crisis to impact Indonesia’s trade in December. The government has vowed to tackle the slowing demand by diversifying export destinations to other potential emerging economies in Asia, the Middle East, South America and Africa to maintain its growth momentum.

Imports grew slower than overall exports at 33.45 percent from January to September to total $129.97 billion, supported by shipments of machinery and mechanical and electricity tools, with China, Japan and Singapore being the major destinations.

Raw material imports dominated 74.63 percent of the overall figure at almost $97 billion in the first nine months of this year, growing by 37.1 percent from a year earlier.

As a result of declining export value in September, the trade balance also recorded a 22.76 percent drop in surplus to $2.72 billion in September from the previous month.

Exports are an important indicator for Indonesia’s economic growth, though domestic consumption and investment are making up a larger portion of the economic bundle, economists say. During the first semester of this year, exports contributed 26.35 percent to the country’s GDP.

Flooding in Thailand — an increasingly important trading partner over the past few months — could affect the October trade balance, BPS and Trade Ministry officials said.