Official Bank Indonesia Press Release: Trade Balance and Inflation

Indonesian Trade Balance April 2014

The non-oil & gas trade balance recorded a deficit of USD $0.89 billion compared to a surplus of USD $2.02 billion in March 2014, due to a contraction in non-oil & gas exports by 7.09 percent (mtm) and increasing non-oil & gas imports by 19.32 percent (mtm). This negative growth in non-oil & gas exports primarily happened to major natural resource-based commodities, such as coal and vegetable oil, in line with weakening demand from China and India. On the other hand, manufacturing exports (such as machinery, mechanical appliances, non-knitted apparel, and footwear) still increased. Meanwhile, increasing non-oil & gas import growth is primarily boosted by the increase in import of 9 out of 10 major goods, such as machinery & mechanical appliances, machinery & electrical appliances, and steel iron.

Indonesia's oil & gas trade balance also recorded a deficit in April 2014, although it decreased to USD $1.07 billion from USD $1.35 billion in March 2014. The decreasing deficit in the oil & gas balance was caused by a deeper contraction of oil & gas imports compared to that of oil & gas exports. Oil & gas import contracted by 7.55 percent (mtm) due to the decrease in oil product imports by 0.50 percent (mtm) and crude oil by 24.78 percent (mtm); meanwhile, oil & gas exports declined by 0.35 percent (mtm) only due to decreasing crude oil exports.

Bank Indonesia believes that the deficit in the April 2014 trade balance still follows the seasonal pattern, among others related to the increasing demand ahead of the fasting month and Idul Fitri celebrations. This condition is predicted to improve influenced by increasing export activities in line with the global economic recovery. As such, Bank Indonesia is confident that the total current account deficit in 2014 may be reduced to below 3 percent of GDP. Bank Indonesia will consistently observe global and domestic risks which may affect the prospect of current transaction deficit and external security.

Indonesia's Trade Balance 2014 (in billion US Dollar):

2014	Export			Import
Month	Oil & Gas	Non Oil & Gas	Total	Oil & Gas	Non Oil & Gas	Total
January	2,50	11,97	14,47	3,55	11,37	14,92
February	2,73	11,90	14,63	3,46	10,33	13,79
March	2,64	12,55	15,21	4,01	10,53	14,54
April	2,63	11,66	14,29			16,26
Jan-Apr	10,50	48,09	58,59			59,51

Indonesia's Trade Balance 2013 (in billion US Dollar):

2013	Export			Import
Month	Oil & Gas	Non Oil & Gas	Total	Oil & Gas	Non Oil & Gas	Total
January	2,66	12,72	15,38	3,97	11,48	15,45
February	2,57	12,45	15,02	3,64	11,67	15,31
March	2,93	12,09	15,02	3,90	10,99	14,89
April	2,45	12,31	14,76	3,63	12,83	16,46
May	2,92	13,21	16,13	3,43	13,23	16,66
June	2,80	11,96	14,76	3,53	12,11	15,64
July	2,28	12,81	15,09	4,14	13,28	17,42
August	2,72	10,36	13,08	3,67	9,34	13,01
September	2,41	12,29	14,70	3,72	11,79	15,51
October	2,72	12,99	15,70	3,47	12,20	15,67
November	2,77	13,17	15,94	3,70	11,21	15,15
December	3,41	13,58	16,98	4,22	11,24	15,46
Jan-Dec	32,63	149,93	182,57	45,27	141,36	186,36

^{Source: Statistics Indonesia}

Indonesian Inflation May 2014

Inflation in May 2014 was under control due to the continued correction in some food prices as well as stable core inflation. The consumer price index (CPI) in May recorded inflation of 0.16 percent (mtm) or 7.32 percent (yoy), slightly higher than inflation in the previous month of -0.02 percent (mtm) or 7.25 percent (yoy).

Core inflation was 0.23 percent (mtm), which is relatively stable - similar to last month - supported by decreasing global prices amidst slight rupiah exchange rate depreciation. Inflation of the volatile food products component still recorded deflation despite the decreasing intensity compared to the previous month. This is boosted by the abundant harvest of red chilies and bird’s chilies and also due to rice harvests in several regions. Meanwhile, inflation of administered prices in May 2014 slightly increased due to higher public transport tariffs, particularly airplanes and trains, along with many holidays.

Bank Indonesia considers that inflation in May 2014 is still positive for achieving of its target inflation of 4.5±1 percent in 2014 and 4.0±1 percent in 2015. Bank Indonesia continues to observe various risks, such as the potential increase in food prices resulting from the approaching dry season in some regions, as well as the indication of a possible new El Nino cycle in the second half of 2014. Therefore, Bank Indonesia will consistently take policy measures to manage inflation and intensify coordination with the government on the central and regional levels.

 
Inflation in Indonesia:

Month	Monthly Growth           2013	Monthly Growth           2014
January	1.03%	1.07%
February	0.75%	0.26%
March	0.63%	0.08%
April	-0.10%	-0.02%
May	-0.03%	0.16%
June	1.03%
July	3.29%
August	1.12%
September	-0.35%
October	0.09%
November	0.12%
December	0.55%
Total	8.38%	1.56%

 

	2008	2009	2010	2011	2012	2013
Inflation (annual percent change)	9.8	4.8	5.1	5.4	4.3	8.4

^{Source: Statistics Indonesia}

Communication Department
Bank Indonesia

Tirta Segara
Executive Director

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