Exports fall 6.73 percent in first semester
The Jakarta Post, Jakarta
The country's export performance weakened during the first half of this year due to weak global demand, the Central Bureau of Statistics (BPS) said on Thursday.
BPS said that exports fell 6.73 percent as of June to US$27.38 billion from $29.35 billion during the same period last year.
The bureau said that oil and gas exports dropped 19.05 percent, while non-oil and gas exports slowed by 2.73 percent to $21.74 billion from $22.36 billion.
BPS deputy chairman Slamet Mukeno said that the slow global economic recovery had affected the country's exports.
Government trade officials had previously said that lingering labor conflicts and security problems at home would have a negative impact on the country's exports as these uncertainties had triggered foreign buyers to shift their orders to other countries in the region.
The decline in exports, coupled with falling foreign direct investments, resulted in modest economic growth mainly driven by consumer spending.
But analysts have said that if exports and investments continued to fall, consumer spending would eventually weaken, thus putting a brake on economic growth.
However, although the country's exports have been negatively affected by the global economic slowdown, they have recently started to pick up, thanks to signs of recovery in the U.S. economy, one of Indonesia's major export markets.
A higher demand trend can be seen in export figures in June to the country's two largest export destinations, the U.S. and Japan, which rose sharply compared to the previous month.
Shipments to the U.S. totaled $802 million in June against $645.0 million in May and those to Japan rose to $589.2 million from $505.4 million.
Meanwhile, BPS said that total exports in June rose to $5.07 billion from $4.7 billion in May, while imports rose to $2.41 billion from $2.39 billion in May.
This brings the country's trade surplus to $2.66 billion this month, compared to $2.31 billion surplus in May.
A pick up in the U.S. and Japan, the world's two major economic giants, should give enough power toward global economic recovery, which eventually will create higher import demand.
But economists warn that renewed concern over the U.S. economy may hurt export growth later in the year, following a string of financial scandals that has sent market confidence stumbling.