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August trade balance indicates recovery of domestic economy: BI
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Containers wait at the Jakarta International Container Terminal (JICT) at Tanjung Priok Port in North Jakarta on March 15 last year. Despite seeing a lower surplus in this year's August trade balance, the central bank says the domestic economy shows signs of improving. (Tempo/Tony Hartawan)
B
ank Indonesia says a lower surplus in August's trade balance was driven by a decline of the surplus in the non-oil and gas trade balance and an increase of the deficit in the trade of oil and gas, but the central band says that this nevertheless shows an improvement in the domestic economy because of rising imports of raw materials and capital goods.
Indonesia recorded a US$293.6-million surplus in its August trade balance with $12.63 billion in exports and $12.34 billion in imports. The surplus slightly decreased from the July figure, which stood at $598.3 million, as the country saw higher growth in imports than in exports.
The non-oil trade balance in August recorded a surplus of about US$920 million, lower than in the previous month, which amounted to $1.02 billion. The decline was driven by a 40.9 percent month-on-month (mom) increase in non-oil and gas imports that exceeded the increase in exports, which were up by 34.8 percent mom.
The increase in non-oil imports, among other things, was driven by the increased imports of raw materials and capital goods, such as machinery, mechanical equipment, electrical equipment, plastics and plastic goods, vehicles and parts.
"This gives an indication of the improvement in domestic economic activity," the director of BI's communications department, Arbonas Hutabarat, said in a statement.
Meanwhile, the increase in non-oil exports was mainly driven by rising exports of fats and vegetable oils, which was in line with the rising price of crude palm oil, as well as of jewelry and gems, vehicles and spare parts, machinery, iron ore, crust and metal.
"Looking ahead, Bank Indonesia will keep a close watch on domestic and global economic developments that may affect the performance of the trade balance, as well as to strive for domestic economic activity to continue to perform well," Arbonas added. (evi)
