Indonesia's 11-month trade surplus dips 28 percent on surging imports

Zakki P. Hakim, The Jakarta Post, Jakarta

Indonesia's trade surplus dropped by almost a third in the first 11 months last year compared to its 2003 performance as imports soared due to increasing oil prices, the Central Statistics Agency (BPS) announced on Monday.

The country posted a trade surplus in the January to November period of US$21.22 billion, with exports rising by nearly 10 percent year-on-year to $62.75 billion and imports surging by 40 percent to $41.53 billion, the agency said in a press conference.

The surging imports mainly came as crude oil imports increased by $1.60 billion or 43.30 percent and imports of oil products soared by $1.74 billion or 52.52 percent from the year before, it said.

Nevertheless, the Ministry of Trade said last week that it was upbeat about the increasing export trend and said that the high imports were a consequence of a higher demand for capital goods.

The ministry said the economic climate was improving with businessmen now confident about bringing in machinery and other capital goods, as well as raw materials, to expand their businesses in the country.

In Monday's conference, the agency echoed the ministry's optimism, reporting that for the first 11 months of the year imports of raw materials and capital goods jumped by 40.15 percent and 44.21 percent respectively compared to the same period in 2003.

Meanwhile, imports of goods for consumption also grew by 32.48 percent.

Moreover, looking at the non-oil and gas exports, which until November had reached $48.50 billion with average monthly exports of $4 billion, the Ministry of Trade looked certain to achieve its $50.73 billion target.

Minister of Trade Mari E. Pangestu said in her year-end press conference that she was optimistic the target would be exceeded thus booking a 10-year record high.

The ministry maintained the previous government's target growth of 7 percent for non-oil and gas exports from last year's $47.41 billion.

Therefore, even as the agency reported that November exports fell 23.12 percent to $5.17 billion compared to the month before, a similar performance in December would be more than enough for the government to secure its target.

It attributed the falling exports in November to reduced activities in ports during the fasting month and the Idul Fitri holiday, thus cutting effective working days.

The same reasoning would also explain why imports dropped by 14.03 percent to $3.71 billion, it said.

Japan, the United States, Singapore and China accounted for 41.88 percent of Indonesia's total exports in November.