Exports, imports down in May, statistics buseau says

Exports, imports down in May, statistics buseau says

Dadan Wijaksana, The Jakarta Post, Jakarta

After showing signs of recovery in previous months, Indonesia's
exports were down again in May, the Central Bureau of Statistics
(BPS) announced on Monday.

BPS said exports for the month declined slightly by 1.5
percent to US$4.7 billion from $4.77 billion in April. This was a
hefty 3 percent drop from the $4.85 billion in May last year.

The slowdown in exports may have been caused by the
strengthening of the rupiah against the US dollar, which analysts
say makes the country's products less competitive than products
from other countries in the region, particularly China, which has
a fixed exchange rate.

The two countries are competing for export markets in a number
of labor-intensive manufacturing industries, including textiles
and footwear.

Since the beginning of the year, the rupiah has been one of
the best performing currencies in the region, appreciating by
about 20 percent.

The country's exports were negatively affected by the global
economic slowdown, although they recently picked up thanks to
signs of a recovery in global demand.

BPS also announced that imports in May were weak, falling by
15.8 percent to $2.39 billion from $2.84 billion in the same
period last year, and down by 1.6 percent from $2.43 billion in
April.

The lower import figures may be a reflection of a slowdown in
both foreign direct investment and domestic investment, as a
result of a deteriorating investment climate here.

Indonesia's production system is heavily dependent on imported
raw materials.

The Investment Coordinating Board (BKPM) said last week
foreign direct investment approvals in the first five months of
the year fell by 59 percent to $1.67 billion, while domestic
investment approvals were down 30 percent to Rp 9.4 trillion.

The trade figures in May caused a slight drop in trade surplus
to $2.31 billion compared to $2.34 billion in April.

Elsewhere, BPS said non-oil exports, a measure of the
country's export competitiveness, fell 0.8 percent to $3.72
billion from April.

And oil exports fell 3.9 percent to $979.7 million due to
global oil prices stabilizing in May after rising in April.

Despite the decline in the export figures, however, the
country still posted slight increases in exports to Japan and the
U.S.

Exports to the U.S. and Japan rose to $645 million and $505.4
million from $592.2 million and $493.6 million in April,
respectively.

Meanwhile, non-oil imports fell 3.8 percent to $1.90 billion,
suggesting the import of capital goods for investment continued
to drop.

Oil imports rose 6.6 percent to $487.8 million.

Indonesia, Asia's only member of the Organization of Petroleum
Exporting Countries, imports only a small amount of refined oil
products.