March trade surplus hits $2.1 billion on export gains

JAKARTA (JP): Indonesia's trade surplus for March rose to US$2.1 billion from $1.7 billion in February, as exports recovered to $5.22 billion from $4.72 billion the month before, the Central Bureau of Statistics (BPS) said on Wednesday.

BPS deputy Kusmadi Saleh said a 21.68 percent surge in oil and gas exports helped push the country's export value to the $5 billion mark for the first time this year.

"The higher oil and gas exports are due to larger sales volume rather than improved oil prices," Kusmadi told reporters in a press meeting.

A hefty 35.67 percent increase in March's oil export contributed to a total of $1.35 billion in revenue from the oil and gas sector, which in February fell to $1.1 billion.

Kusmadi attributed the higher oil exports to seasonal growth.

"On the other hand, crude oil prices in March dropped to an average of $25.36 (a barrel) from $25.83 in February," the BPS monthly report said.

Last year soaring world oil prices fueled Indonesia's exports and enabled the country to hit record high export earnings of over $60 billion.

But this year fuel prices are seen falling as a global economic slowdown is slashing energy demand.

However, the oil prices were within the range the Organization of Petroleum Exporting Countries (OPEC) has deemed as still favorable.

As for March's non-oil and gas exports, BPS added, revenue rose by 6.95 percent to $3.86 billion from $3.61 billion in the previous month.

It said the main non-oil and non-gas export commodities were electrical appliances and electronics, which earned $537.6 million; logs and wood products with $299.2 million; machinery and engines with $248.7 million and fabric and garments with $240 million.

Indonesia's main non-oil and non-gas export destinations remained the United States with $608.6 million; Japan with $604.7 million; and Singapore with $392.1 million.

But a slump in the U.S economy took its toll on Indonesia's export gains, causing it to fall 25 percent in March.

In the same month, non-oil/gas exports to Japan and Singapore rose by 17.2 percent and 5.4 percent, respectively.

BPS further reported that total imports in March grew slightly by 0.37 percent to $3.04 billion from $3.03 billion in February.

Oil and gas imports rose sharply by 46.06 percent to $366.9 million, while non-oil and gas imports fell by 3.77 percent to $2.67 billion.

Despite the thin import growth, many believe the country's imports will remain subdued given the weak rupiah.

Kusmadi added that pressure from the weaker rupiah threatened future export earnings, as local industries depended too much on imported raw materials.

Kusmadi also warned of high inflation, which was 0.46 percent in April, as against 0.89 percent in March.

April's increase of the consumer price index drove the inflation rate for the calendar year to 2.57 percent.

The consumer price index on a year-on-year basis, which measures the April inflation against the same month in the previous year, stood at 10.51 percent.

"The past three months, the year-on-year inflation rate looked worrisome," Kusmadi said.

He said the government might miss its inflation target range of between 7 to 9 percent this year, if this upward trend continued.

He blamed the higher than expected inflation rate on the weaker rupiah, which lost around 17 percent of its value this year due to political uncertainty.

Although the rupiah is seen recovering lately, many analysts said its rebound was fragile because more political heat remained in the offing.

Kusmadi said the weaker rupiah drove inflation up as industries with high import dependency must raise the price of the products they sold.

"This month's inflation comes largely from commodities with high import inputs," he explained.

"Of the 44 commodities, gold accessories were the largest contributor to the inflation rate because gold prices fluctuate in line with the currency exchange course," he added.

Overall, other major contributors to April's inflation were the housing price index with a 1.01 percent price increase, followed by food and cigarettes (tobacco) with 0.91 percent and clothes with 1.59 percent. (bkm)