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Imports, exports pick up as economy shows sign of recovery
The countryâs monthly imports, including capital goods and raw materials, as well as exports picked up in August, indicating signs of recovery in the countryâs economy
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The country's monthly imports, including capital goods and raw materials, as well as exports picked up in August, indicating signs of recovery in the country's economy.
The Central Statistics Agency (BPS) announced on Tuesday that total imports rose by 21.69 percent month-to-month (mtm) to US$12.27 billion in August, while total exports rose by 10.79 percent to $12.70 billion in the same period, giving a surplus of $433.8 million in the country's international trade.
According to the agency's data, imports of capital goods such as machineries, mechanical equipment and electrical equipment recorded a 23 percent increase to $2.04 billion mtm in August, a reversal of the previous month's data that showed a 22.4 percent monthly decline.
Imports of mechanical equipment, for instance, rose by 26.5 percent mtm to $1.95 billion and those of electrical equipment surged 20.4 percent mtm to $1.26 billion. In July, both of these segments fell 23.6 percent and 21.6 percent, respectively, on a monthly basis.
At the same time, imports of raw materials increased as well, climbing 18.7 percent mtm to $9.15 billion in August. A month before, raw material imports dropped 21.4 percent.
According to the latest trade data, imports of plastic increased 40.3 percent mtm to $619.6 million, while steel and metal climbed by more than half on a monthly basis to $477 million.
BPS head Suryamin said that the August data on capital goods imports reflected an improvement in the economy.
'Those are all the components needed for infrastructure projects and other works that the government promotes. So it seems that economic activities are rolling again and factories are picking up steam,' he told a press conference on Tuesday.
BPS' conviction of improving economic activities is also backed by export data, especially on automotive, automotive parts and machineries.
Meanwhile, total exports rose by 10.79 percent mtm to $12.70 billion in August. Of the total, non-oil and gas exports rose reached $11.17 billion in the same month, an 11.23 percent increase compared to the figure recorded in July.
Exports of automotive and its parts surged 41 percent to $508 million in August, while those of machineries were up 37.3 percent to $538.9 million. They posted contrasting results just a month before with declining exports figures.
Overall, imports stood at $12.27 billion and exports amounted to $12.7 billion in August, leading to a trade surplus of $433.8 million.
Total imports in the January to August period reached $96.3 billion, an 18.96 percent decline compared to the figures in the same period, last year. For the January-August period, total exports reached $102.52 billion, a 12.70 percent drop from the figures in the same period, last year, resulting in trade surplus of $6.22 billion in the eight-month period.
Bank Danamon economist Dian Ayu Yustina said the increase in exports and imports showed a sign of recovery in the country's economy.
'We assume that corporates have begun to react to the government's planned projects and started importing capital goods and raw materials,' she said. 'If the government manages to get the projects started, they will surely absorb labor. People's purchasing power will rise and it will support domestic consumption as the driver of economic growth,' she added.
Meanwhile, Barclays Bank economist Wai Ho Leong noted that the surge in capital goods imports showed that the restart in public spending may be trickling down into infrastructure projects.
'We believe that today's better-than-expected trade report is an encouraging sign that public spending is gaining more momentum and is likely to set the stage for a stronger rebound in growth in the coming months,' he wrote in a research note.
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