Despite a persisting deficit in the countryâs trade balance, the government is still upbeat it will record a sizeable surplus from non-oil and gas commerce
Despite a persisting deficit in the country's trade balance, the government is still upbeat it will record a sizeable surplus from non-oil and gas commerce.
The balance may post an annual surplus exceeding US$10 billion at the end of this year, driven by faster overseas shipments of manufactured goods into some major markets, according to Deputy Trade Minister Bayu Krisnamurthi.
The trade balance secured a $6.12 billion gain from non-oil and gas trade in the first half of this year, derived from exports of $73.14 billion and imports of $68.18 billion, the Central Statistics Agency (BPS) has reported.
'The key will be the exportation of industrial goods. With the continuing growth of exports of such products in the second half, we will have an additional surplus of $4 billion or $5 billion,' Bayu announced at a media briefing on Tuesday.
The overseas sales of industrial goods, which made up 66.52 percent of total non-oil and gas exports, increased by 4.47 percent to $59.09 billion in the first six months of this year on the back of several products, such as palm oil derivatives, automotive parts, jewelry, wood products and chemicals.
Southeast Asia's biggest economy aims to see exports breach $190 billion this year, up by 4.1 percent
from last year. Exports only amounted to $88.83 billion in the January-June period, down 2.46 percent from 2013.
The government will temporarily maintain its target for this year, remaining optimistic that exports will rebound throughout the rest of the year as demand from trading partners usually peaks in the second half, Bayu said further.
Stronger demand might come from key destinations, such as the United States, and some non-traditional markets in the Middle East and Africa, he added.
Outbound shipments to the US expanded by 4.74 percent to $7.9 billion in the first half, while exports to non-traditional markets, categorized roughly as countries outside the 13 major trading partners, surged by 7.48 percent to $22.78 billion, BPS data shows.
Based on mapping by the Trade Ministry, a few prospective commodities and goods will help drive exports, including vehicles and automotive parts, cacao, coffee, shrimp and furniture.
Exports will also get a notable boost from the resumption of shipments of mineral concentrates from some miners, including PT Sebuku Iron Lateritic Ore, PT Lumbung Mineral Sentosa and PT Freeport Indonesia, after a ban on unprocessed mineral exports in January.
Freeport's alone may contribute $1.7 billion to the country's exports, according to an estimate by the Energy and Mineral Resources Ministry.
Bank Danamon economists Anton Hendranata and Dian Ayu Yustina said in their research note that rising exports to advanced countries such as the US and some European countries indicated demand for manufactured products.
'We expect some pick up on exports [in the second half] as demand from advanced countries is improving and there may be some revival of mineral fuel exports as disputes between the government and some of the mining companies may have reached a solution,' they said in their note.
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.