I

ndonesia'€™s exports unexpectedly rose for the first time this year in March, boosting confidence that the trade balance may maintain a surplus till the end of the year.

 Exports increased by 1.24 percent to US$15.21 billion in March from the same month last year, driven largely by non-oil and gas shipments, such as palm oil, coal and automotive parts, the Central Statistics Agency (BPS) announced Friday. The rise followed declines of 5.8 percent in January and 3 percent in February.

In contrast, total imports dropped by 2.34 percent to $14.54 billion from the previous year, particularly on the back on lower inbound shipments of capital goods, raw materials and intermediary goods for the country'€™s manufacturing sector.

With the fall in imports, the country managed to generate a surplus of $673.2 million in its foreign trade in March. Combined with another surplus of $843 billion in February, the total trade surplus during the first three months of this year reached $1.52 billion.

The BPS'€™ deputy head for distribution and service statistics, Sasmito Hadi Wibowo, said the upward trend in exports would likely persist during the coming months, primarily driven by the rising prices of commodities, such as rubber, cocoa and palm oil.

'€œAlthough the export volume will not increase, the value will be higher due to better prices ahead,'€ he told reporters after the announcement. Palm oil and coal outbound shipments rose respectively by 12.13 percent and 14.76 percent by value on a monthly basis.

On a quarterly basis, the export of manufactured goods also showed an improvement, led by jewelry (up by 112.5 percent), mechanical equipment (up by 8.1 percent) and automobiles (up by 10.8 percent) in January to March this year compared to the same period last year.

Imports of capital goods, however, plunged by 6.46 percent and the purchase of raw materials and intermediary goods decreased by 5.81 percent in the first quarter compared to last year.

Trade Minister Muhammad Lutfi claimed that the government'€™s measures to rein in the trade deficit had produced positive results, shown by the trade surplus in the first three months of the year. '€œAll fiscal and monetary measures that enhance the trade balance must remain in place and we must see in the future how the positive trade balance can help improve our current account and other macroeconomic indicators,'€ he told reporters at his office.

The government has introduced a number of rules to curb the surge in imports, such as raising import taxes on certain goods.

The central bank has estimated that the current account deficit may stand at around 2 percent of gross domestic product (GDP) in the first quarter, a level considered healthy for the economy.

The deficit settled at 3.3 percent last year, with a record 4.4 percent posted in the second quarter, as the country struggled with dwindling exports and surging imports.

 Based on the quarterly trade data, some economists have provided a brighter outlook for trade in the coming months, which is expected to further reduce the current account deficit.

 Barclays Capital economists said in a research note that the weaker rupiah in April would help push up exports, particularly manufactured goods, both in the second quarter and the remainder of the year.

 '€œWe believe there is an offsetting trend increase in manufactured exports '€” largely driven by food, automobiles and textiles. As it stands, the rebound in manufactured exports present some risks to our current deficit forecast for this year,'€ they said in their note, referring to 2.5 percent of GDP.

 '€œWe estimate that the current account deficit [level] to be released next week may have narrowed further to 1.8 percent of GDP, or $4.2 billion, in the first quarter, down from 2 percent of GDP in the fourth quarter last year,'€ Hak Bin Chua, an economist from Bank of America Merrill Lynch, said.