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June exports surge, but still far below govt target
The countryâs monthly exports rose slightly in June, but the surge is still insignificant as export figures for the first half of this year were still far below the governmentâs target
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he country's monthly exports rose slightly in June, but the surge is still insignificant as export figures for the first half of this year were still far below the government's target.
The agency announced on Wednesday that exports in June rose by 5.91 percent to US$13.44 billion on a month-on-month (mom) basis from May, even though its year-on-year (yoy) performance dropped 12.78 percent yoy.
'The increase in June exports was caused by increases in oil and gas exports by 6.27 percent and non-oil and gas by 5.87 percent,' BPS head Suryamin said in a press conference.
The monthly increase in June exports was contributed by the surge in shipment of crude palm oil (CPO) and mineral products, the agency's data said.
The US was Indonesia's top destination for non-oil and gas exports in June with $1.38 billion, followed by China ($1.23 billion) and Japan $1.11 billion, while exports to the EU stood at fourth place with $1.39 billion. 'The US remains at the top of the list due to its economic recovery,' BPS deputy head for distribution and service statistics Sasmito Hadi Wibowo said.
In the first sixth months of this year, overall exports declined 11.86 percent to $78.29 billion, creating a major challenge for the government to reach its 28 percent export growth target this year.
Based on sectors, Indonesia's non-oil and gas exports in manufacturing and minerals between January and June this year fell 6.36 percent and 9.8 percent, respectively. Meanwhile, the agriculture sector booked an increase of 1.35 percent yoy.
The country's imports fell 17.42 percent yoy in June to $12.96 billion from the same month last year, contributed by the drop in non-oil and gas imports that plunged 15.5 percent yoy and decline of oil and gas imports by 24 percent yoy.
The fall in imports helped the country record a surplus of $477 million in June, the sixth monthly surplus recorded since January. With the June figure, the combined trade surplus enjoyed in the six consecutive months reached $4.35 billion.
The fall in non-oil and gas imports was mainly due to an 82.2 percent slump in purchases of ships and floating structures, while machinery and mechanical equipment rose 26.3 percent.
From January to June, overall imports declined 17.81 percent to $73.94 billion. The drop was mainly contributed by falls in imports of raw materials, capital and consumption goods, which declined 18.78 percent, 13.83 percent and 15 percent, respectively, due to the country's economic slowdown.
The economy shrank to its lowest level in six years in the past few quarters, with the latest first quarter reading showing 4.7 percent growth, a level unseen since 2009.
Speaking during the same event, Trade Minister Rachmat Gobel said the government would try to increase exports to non-traditional markets such as African countries to achieve the 28 percent growth target.
He also hoped Iran would also be able to improve its trade relations with Indonesia after the trade sanctions imposed on the country were lifted in the coming months.
Commenting on the performance, Barclays Singapore analysts Wai Ho Leong and Angela Hsieh said the fall in imports was partly caused by the decline in the ability to consume imported durables due to the sharp decline in rupiah against the US dollar.
'Despite the disappointing export print, we continue to expect manufacturing shipments to improve in the coming months, albeit at a slow pace,' the analysts said.
The continuous trade surplus is also deemed as bringing the country's current account to a more sustainable position and within Bank Indonesia's comfort zone, according to Glenn Maguire, ANZ chief economist for South Asia, ASEAN and the Pacific, and Daniel Wilson, ANZ economist for ASEAN and the Pacific.
'The current account and gross domestic product [GDP] growth profile suggest the interest rate can be cut now, but inflation and financial market volatility will delay monetary policy easing until later this year,' Maguire and Wilson said in a written statement.
