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Bank Indonesia Forecasts Surplus in May

Jakarta. Indonesia expects to post a trade surplus in May on recovering exports, after an unexpected deficit in April, according to Bank Indonesia governor Agus Martowardojo.

The countrya��s trade balance took a harsh blow from its mineral ore ban in April and swung to a deficit of $1.95 billion a�� to much surprise of many economists a�� posting its biggest fall in five years.

a�?The trade deficit on April was quite significant and surprising, but it seem we can reach a surplus on May,a�? Agus said.

Despite a more positive sentiment for May, Agus noted that exports will still be prone to pressure throughout the second quarter of the year as the countrya��s main commodities a�� such as palm oil and coal a�� continues to dwindle.

a�?Coal export is lower because of lower demand, whereas palm oil is a seasonal commodity,a�? he said. a�?We havena��t seen much growth on mineral export so far.a�?

China, Indonesiaa��s biggest trading partner, reported a slowing growth in the first quarter, affecting demand for coal and oil.

Indonesiaa��s exports declined 5.92 percent to $15.2 billion in April, compared with March. The figure fell 3.16 percent compared with the same period last year.

The export decline was due to a 7.09 percent slowdown in non-oil and gas export to $11.6 billion and a 0.35 percent fall on oil and gas export to $2.6 billion.

The central bank governor added that despite positive signs in May, attempts to boost the countrya��s exports must continue.

a�?Especially, in diversifying where wea��re exporting,a�? he added without giving more details on any prospective countries.

The Central Statistics Agency (BPS) will announce trade data on July 1.

BPS showed that Indonesia non-oil and gas exports to its minor trading partners a�� outside European Union, China, Japan, United States, India, Australia, South Korea, Taiwan, and Southeast Asian countries a�� rose 5.5 percent to $14.6 billion.

Throughout the January-April period this year, China remains Indonesiaa��s biggest trading partner, contributing $6.2 billion a�� or 12.9 percent a�� to the nationa��s total exports.

China primarily imports coal and palm oil, as well as goods such as smart phones, clothes, and toys.

The United States followed at $5.2 billion a�� 10.84 percent a��- and Japan came third with $4.74 billion, or 9.86 percent.

Indonesiaa��s economy grew 5.21 percent in the first three months this year.

The central bank maintained its policy rate at 7.5 percent for a seventh straight month on Thursday.

Source: www.thejakartaglobe.com, Wednesday, June 13 2014