Thu, 02 Oct 2003

RI's exports remain weak, BPS says

The Jakarta Post, Jakarta

A hefty drop in non-oil and gas exports in August contributed to a 5.35 percent decline in the country's export value during the month compared to the level in the previous month, the Central Statistics Agency (BPS) said on Wednesday.

BPS said that exports in August fell to US$4.97 billion from $5.25 billion in July as the weak global economy continued to suppress demand for Indonesia's export commodities.

The agency said that the decline was mostly caused by a 12.6 percent decline in non-oil and gas exports from $4.25 billion to $3.72 billion.

The weak export numbers might well signal a slower pace in this year's economic growth prospects.

Although the government is standing firm with its original 4 percent growth target, many have said it is no longer feasible.

The Asian Development Bank (ADB) was the latest to join that group, by saying in its latest report that the economy would likely grow by a rate of 3.4 percent this year. The economy grew last year by 3.7 percent.

However, BPS chief Sudarti Soerbakti downplayed such a concern, saying that despite the slowdown in August, export performance overall has been relatively encouraging so far.

"Although on-month (August compared to July) exports have declined, it still posted a 0.86 percent rise on-year (August this year compared to August last year)," she said, adding that the rise was even more significant when taken in context for the whole year.

Over the first eight months of the year, exports were valued at $40.66 billion, or 8.75 percent rise from the same period last year, which stood at $37.39 billion.

This included a 5.7 percent increase in non-oil and gas exports in the January-August period from $29.77 billion last year to $31.47 billion so far this year.

The government has targeted a full year export value of around $60 billion this year.

Sudarti also painted a positive outlook for non-oil and gas exports in months to come, which is consistent with continuing signs of recovery in the U.S. economy, one of the country's main export destinations, along with Japan and Singapore.

The country has been struggling to boost exports as the world's global economy has been sluggish in recent years, coupled with the fact that local exporters had to deal with various problems including labor conflicts, security problems, inefficiency, and a lack of available financing.

Wednesday's reports also stated a fall in the country's trade surplus, resulting from a decline in exports and an increase in imports.

The trade surplus fell in August to $2.25 billion from $2.71 billion in July, as imports rose to $2.71 billion in August from $2.54 billion posted the month before.

On-year imports, however, were down by 3.9 percent.

RI's Export Performance (in billions of dollars) --------------------------------------------------------

July Aug Jan-Aug Jan-Aug

(2003) (2002) (2003) -------------------------------------------------------- Oil & gas $0.99 $1.25 $ 7.62 $ 9.19 Non-oil & gas $4.26 $3.72 $29.77 $31.47 --------------------------------------------------------- Total of exports $5.25 $4.97 $37.39 $40.66 --------------------------------------------------------- Source: BPS