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

“The trade deficit on April was quite significant and surprising, but it seem we can reach a surplus on May,” 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 country’s main commodities — such as palm oil and coal — continues to dwindle.

“Coal export is lower because of lower demand, whereas palm oil is a seasonal commodity,” he said. “We haven’t seen much growth on mineral export so far.”

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

Indonesia’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 country’s exports must continue.

“Especially, in diversifying where we’re exporting,” 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 — outside European Union, China, Japan, United States, India, Australia, South Korea, Taiwan, and Southeast Asian countries — rose 5.5 percent to $14.6 billion.

Throughout the January-April period this year, China remains Indonesia’s biggest trading partner, contributing $6.2 billion — or 12.9 percent — to the nation’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 — 10.84 percent —- and Japan came third with $4.74 billion, or 9.86 percent.

Indonesia’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