Unharmed by firmer rupiah, five-month exports rise 11.7%

Unharmed by firmer rupiah, five-month exports rise 11.7%

Evi Mariani and Dadan Wijaksana, The Jakarta Post, Jakarta

Despite the rupiah's strong showing since the start of the year,
Indonesia still posted a 11.66 percent rise in exports in the
January-May period compared to the same period last year, the
Central Statistics Agency (BPS) reported.

Exports in the first five months of the year reached US$24.9
billion against $22.36 billion a year earlier, with non-oil and
gas exports rising to $19.12 billion from $17.68 billion, BPS
director Soedarti Surbakti told a media briefing on Tuesday.

Exports of machinery and electrical equipment were the biggest
contributors to overall non-oil and gas exports (contributing 13
percent), while timber and timber-based products came in second
at 6.4 percent. The two categories respectively recorded $2.5
billion and $1.2 billion in total sales during the January-May
period.

The rupiah has appreciated by 8 percent against the U.S.
dollar since the start of this year. This has raised fears that
it would make Indonesian exports less competitive against exports
from peer countries whose currencies have not appreciated as
rapidly as the rupiah.

Appearing to confirm this, Soedarti said: "For the first five
months of the year, exports performed relatively well. However,
May's exports experienced a decline."

Weighed down by lower oil and gas exports, the country's
exports in May declined by 1.62 percent compared to April,
offsetting a rise in non-oil and gas exports posted during the
same period.

The BPS said Indonesia's May exports stood at US$4.92 billion,
lower than the $5 billion posted the month before, despite a 1.03
percent rise in non-oil and gas exports from $3.8 billion in
April to $3.92 billion in May.

Oil and gas exports in May were recorded at $1 billion, a 10.7
percent drop as against $1.1 billion posted in April.

The price of Indonesian crude oil on the global market fell
3.3 percent in May to $26.51 per barrel, down from $27.41
previously.

"Oil prices have significantly impacted on the overall figures
because currently oil and gas sales make up between 23.4 and 24
percent of overall national exports," Soedarti said.

Meanwhile, imports for the first five months increased to
$13.93 billion from $11.51 billion a year earlier, with non-oil
and gas imports rising to $10.83 billion from $9.0 billion
previously.

In May, imports also grew by 6.7 percent to $2.87 billion from
$2.69 billion in April, bringing the country's trade surplus
during the month to $2.05 billion, down from the $2.31 billion
posted in April.

The trade surplus, or net exports, contributes around 9
percent to the nation's gross domestic product (GDP), with
investment and domestic consumption being the other growth
engines in the economy.

However, while their contribution is limited, a good export
showing is good for the economy as high export sales mean more
jobs as exporters expand capacity to meet rising demand.

Since most exporters use imported raw materials for their
products, a rise in imports also often indicates a higher demand
for exports.