Citing a release from Reuters, Channel News Asia is reporting that Indonesia’s trade surplus narrowed in November to USD 2.41-billion as imports increased more than expected while exports extended their weakening trend, data from the statistics bureau showed on Friday (15/12/23.)
Southeast Asia’s biggest economy has seen its shipments decline by value in the past few months due to falling commodity prices and slowing global demand. In November, exports fell 8.56-percent on a yearly basis to USD 22-billion versus expectations of a 9.36-percent drop in a Reuters poll.
Shipments of Indonesia’s coal and palm oil, which are its top commodities, were down 34.25-percent and 12.60-percent on an annual basis, respectively, as prices continued to weaken in November, say Channel News Asia.
The total volume of coal and crude palm oil exports in November was 33.9-million metric tons and 2.5-million metric tons, respectively.
Imports, on the other hand, were up 3.29-percent on a yearly basis to USD 19.59-billion, much higher than the prediction in the poll for only a 0.20-percent increase. The imports were boosted by rising purchases of consumer and capital goods, up 19.82-percent and 13.66-percent, respectively. Meanwhile, imports of raw materials were down 1.05-percent, according to Channel News Asia.
“Higher imports in consumer goods were driven, among others, by imports of food commodities,” Pudji Ismartini, deputy head of Statistics Indonesia, said at Friday’s press conference.
Indonesia imported 433,000-metric tons of rice in November, up from 312,000-tons in October, followed by higher imports of sugar and corn in the same month, the bureau’s data shows.
The government has been trying to keep headline inflation low by ensuring a sufficient food supply, partly supported by imports. Last month, Indonesia’s annual inflation rate accelerated more than expected to 2.86-percent due to rising food prices, including rice. However, the inflation rate is still within Bank Indonesia’s (BI) target range for 2023 at 2-percent to 4-percent, Channel News Asia say.
Irman Faiz, Bank Danamon’s economist, said the November trade balance is still in line with his expectation of a narrowing surplus in the future, and maintained his forecast for a current account deficit at 0.4-per cent of GDP this year.
“The current account deficit continues to stay below the historical average, providing a buffer for rupiah from portfolio flows pressure. As a result, we expect BI to keep the policy rate at 6.0-percent until the Fed decides to pivot,” he said.
BI’s next policy review is on December 21, where expectations are for rates to be kept steady again following last month’s on-hold decision.
Source: Channel News Asia, Reuters
Stock image by Ian Taylor on Unsplash
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