Exports up 26% in first seven months

Exports up 26% in first seven months

Zakki P. Hakim, The Jakarta Post/Jakarta

Amid lingering uncertainty over the economy, as evident from the
volatile rupiah, the Central Statistic Agency (BPS) reported on
Thursday that the country's exports continued to put in a strong
showing during the first seven months of the year.

Thanks in part to strong global demand for crude palm oil,
coal and other mining products, January-July exports stood at
$47.58 billion, a 25.85 percent increase over the same period in
2004.

Non-oil and gas exports, which account for more than three
quarters of Indonesia's total income from international trade,
rose 27.69 percent to $37.18 billion in the first half of the
year compared to the corresponding period in 2004.

Sales of oil and gas, meanwhile, rose 19.69 percent in the
same period to $10.40 billion.

Indonesia's exports hit a record high last year, reaching
$69.71 billion, up 11.49 percent from 2003. This was mainly
attributable to strong sales of non-oil and gas commodities and
goods, including palm oil, electronics goods, clothing, coal and
tin.

Despite the encouraging trend and a good chance of this year's
exports exceeding last year's, Minister of Trade Mari E. Pangestu
maintained her conservative stance as regards this year's export
targets.

She repeatedly pointed out that the strengthening greenback
had helped boost the value of the country's exports. However,
this did not mean an improved performance in terms of volume and
production.

"We have to have a target that is based not just on value but
also volume," Mari said.

She said that real growth, which took account of volume
growth, during the first six months of the year stood at 10.2
percent.

"Considering the current economic situation, we prefer to set
a conservative target of between 6 percent and 8 percent real
growth this year," she said, while pointing out that 8 percent
growth was still high.

She said that although the weakening of the rupiah against the
U.S. dollar should make Indonesian products more competitive on
global markets, it would also increase production costs here as
many industries rely heavily on imported raw materials.

"Manufacturing might slow down, but exports of commodities
should benefit from the weakening rupiah," she said.

The ores, slag and ash sector was the strongest performer,
with exports more than doubling to $1.89 billion from $681.4
million in the same period of 2004.

The mineral fuels sector, which includes coal, also showed
impressive growth of 81 percent, with export value increasing to
$2.38 billion.

According to the BPS, global demand for coal has increased as
countries around the world seek alternative energy sources due,
in part, to current soaring oil prices.

The country's trade balance recorded a surplus of $14.41
billion for the first seven months of the year, with imports
standing at $33.17 billion.

The July trade surplus came in at $2.17 billion.

Imports rose to $4.82 billion in July, 2.11 percent higher
than the $4.72 billion recorded in June.