Finance Minister Sri Mulyani Indrawati said the country must focus on exports again amid stagnant investment and consumption growth and a possible decline in government spending this year.

“In the fourth quarter [of 2016], our exports showed positive progress despite a year-on-year [yoy] decline,” she said during an Indonesia Eximbank investor gathering in Jakarta on Tuesday, adding that increasing commodity prices would jack up the country’s export value.

According to data from the Central Statistics Agency, the country’s export value has displayed positive trends since September, growing 3.18 percent per month until December. However, total exports of US$144.4 billion in 2016 were still lower than the $150.4 billion recorded in 2015.

In 2016, the country saw 5.01 percent growth in consumption and a 4.48 percent increase in investment, while government spending retreated by 0.15 percent. “Consumption is still robust with an average growth rate of above 5 percent in the last 10 years. However, investment growth is still below 5 percent,” Sri Mulyani said.

The National Development Planning Board (Bappenas) has set an export growth target of 1.5 percent to 1.7 percent for 2017. Consumption growth is expected to hit 5.3 percent, while government spending and investment is predicted to reach 4.7 and 5.6 percent, respectively.

Economist Chatib Basri said Indonesia had an encouraging outlook for its exports this year, despite the growing risk of US protectionism. He recommended exporters focus more on the ASEAN market.

“Tariffs and excises in the ASEAN market are zero and the logistics costs to Thailand, for example, are cheaper than sending cargo to Sulawesi. Business people should think about the ASEAN market,” he said.

In 2016, Indonesia’s exports to ASEAN countries stood at $144.43 billion, or 21.88 percent of the country’s total exports. This was higher than exports to the US, China and Japan, each of which contributed only 11.94 percent, 11.49 percent, and 10.46 percent, respectively.

In terms of growth, exports to ASEAN climbed 5.34 percent yoy, making ASEAN the second fastest growing export destination after China, which scored a 13.85 percent increase. Indonesia is known for its commodities-based exports such as oil, coal and palm oil.

The World Bank predicts that oil prices in 2017 will jump 29 percent to $55 per barrel as the Organization of Petroleum Exporting Countries (OPEC) has agreed to trim production. According to the World Bank’s data, known as The Pink Sheet, some of Indonesia’s main commodities saw price increases in the last quarter of 2016.

The average coal price reached $93.2 per metric ton from the previous price of $67.5 per metric ton in the third quarter. Meanwhile, the price of crude palm oil (CPO) slightly increased to $752 per metric ton compared to $715 per metric ton in the previous quarter.

Responding to Sri Mulyani’s call to revitalize exports, Indonesia Eximbank acting executive director Suswijono Moegiarso said the lender would disburse Rp 102.6 trillion ($7.7 billion) in export credit and allocate 10 percent of it for small and medium enterprises.

In 2016, the bank disbursed Rp 1 trillion in export oriented people’s business credit.

Popular

PDI-P will likely be part of opposition: Ganjar

Indonesia one step from Olympics after beating South Korea

Bahlil leads task force to boost sugar, bioethanol production in Papua