Economic indicators improving, says BPS

JAKARTA (JP): Indonesia's economic indicators continued improving in May despite a slight drop in non-oil and gas exports according to data issued by the Central Bureau of Statistics (BPS) here on Friday.

The monthly inflation rate increased by 0.5 percent in June, down from the 0.8 percent increase in May while the year on year inflation in the month was 2.14 percent as compared to 2.86 percent in the same period last year.

BPS deputy for economy Kusmadi Saleh said that the rise in the June inflation was mostly contributed by the increase in food prices.

"After the increase in electricity rates, elements of the food price index that had previous been negative have all turned positive now," Kusmadi said in a press meeting.

The bureau said that inflation of food stuff reached 0.16 percent, with meat prices rising by 4.41 percent, the highest level recorded in the food category.

The housing price index rose by 0.4 percent, contributing 0.08 percent to June's inflation rate, the bureau said.

Kusmadi said that with January to June inflation rate already reaching 2.86 percent, it was unlikely that this year's inflation target of 5 percent could be achieved.

He said that the August general session of the People's Consultative Assembly (MPR) and the upcoming hike in fuel prices in October was likely to inflict more inflation.

"There is no guarantee that political uncertainties will diminish after the general session of the MPR is over," he said.

BPS recorded a decline in total exports by 2.94 percent in May to US$4.8 billion from $4.9 billion in April.

The drop was triggered by a decline of 3.99 percent in non-oil and gas exports to $3.8 billion in May from $3.9 billion in April. Oil and gas exports rose by 1.3 percent due to soaring crude oil prices.

It recorded increased crude oil prices of $27.65 per barrel in May up from $24.08 per barrel the month before.

But it stated that total exports from January to May reached $23.9 billion, or about 32.3 percent higher than the $18.09 billion in the same period last year.

Imports rose by 1.15 percent to $2.355 billion in May from $2.329 billion in April, BPS said.

The monthly increase was driven by imports in the non-oil and gas sector, which grew to $1.9 billion from $1.8 billion during the month. Oil and gas imports declined by 2.95 percent to $440.5 million from $453.9 million in the same period.

An increase of 2.14 percent in non-oil and gas imports, the agency said, indicated improvements in the imports of production raw materials.

But of the $1.9 billion in May's non-oil and gas imports, the purchase of raw material made up 75 percent, declining slightly from 79 percent in April, it said.

The trade surplus in May rose 18 percent to $2.47 billion from $2.1 billion in May last year, but dropped from $2.66 billion in April.

The drop was mainly caused by the fall in non-oil exports, Kusmadi said.

"Our industries are already too dependent on imported raw material, an increase only shows that production is improving," he said.

However, he warned that if the rupiah continued to depreciate it would aversely affect the ability to purchase the products by these industries.

He cited the textile industry, chemical, fertilizer and public transportation services as depending largely on imported raw materials.

Kusmadi said that for instance some 45 to 48 percent of prices of textile products depended on the rupiah's movement against the U.S. dollar.

BPS further reported that tourist arrivals in May dropped by 11.5 percent down to 298,815 people from arrivals of 337,818 people in April.

However, between the period of January to May 2000, tourist arrivals rose by 3.16 percent compared to the same period last year.

Kusmadi said that since 1999, tourist arrivals showed a slight upward trend, with several seasonal drops throughout the year.(bkm)