Exports rise on rupiah's slump, robust demand
Dadan Wijaksana, Jakarta
A weaker rupiah and strong global demand helped boost the country's exports in the first half of the year, with the Central Statistics Agency (BPS) reporting a 3.14 percent increase from the same period last year.
Total exports as of June reached US$31.41 billion compared to $30.45 billion during the same period in 2003, BPS head Choiril Maksum said on Monday.
"The decline in the rupiah has to some extent made our products more competitive in the international market. But a strong economic showing in the U.S., Japan and Singapore also helped," Choiril said.
The U.S., Japan and Singapore are the country's main export destinations, with the three absorbing some 38 percent of the country's total non-oil and gas exports. As the economies of the three countries have improved, global trade has received a boost in line with the rising demand.
The weakening rupiah makes the country's exports relatively cheaper in the export market compared to products coming from countries whose currencies have not depreciated as fast as the rupiah.
After hovering at around 8,400 per dollar at the start of the year, the local unit -- which has had to endure various shocks including soaring oil prices, a U.S. interest rate hike and political uncertainty at home due to the elections -- weakened to as low as 9,400, making the rupiah Asia's worst performing currency.
Choiril was upbeat about the prospects for exports in the coming months. He said that despite expectations for a rebound in the rupiah, the predicted continued recovery in the global economy should further increase demand for exports.
In June alone, Indonesia's total exports stood at $5.69 billion, the fourth consecutive month exports were above the psychologically important $5 billion level. The country remains on track to meet its full-year export target of $60 billion.
Indonesia wants to improve its export performance to contribute more to economic growth, so the country will not be overly dependent on domestic consumption to drive the economy. At present, exports make up less than 15 percent of gross domestic product.
Elsewhere, the BPS said non-oil and gas exports grew by close to 3 percent during the first half of the year, mainly on the back of the higher export of mining products (growing by 8.4 percent) and industrial products (1.9 percent).
Exports of agricultural products declined by 2.8 percent.
Industrial products again made up the largest percentage of overall exports, accounting for about 65.5 percent of total exports. Gas and oil exports accounted for 23.6 percent.
Meanwhile, imports in June rose 9.9 percent to $3.54 billion from $3.22 billion the previous month. Imports during the first half of the year increased by 27.2 percent to $20.38 billion compared to the same period last year.
The country's trade surplus fell slightly to $2.15 billion in June from $2.28 billion in May and $2.85 billion in the same month last year.
Analysts said the lower trade surplus meant the country needed to work harder to push exports.