Indonesia Posted Unexpected Large April Trade Deficit and higher Inflation

Inflation

Indonesian inflation in May 2014 was recorded at 0.16 percent (month-to-month), slightly higher than previous forecast of 0.09 to 0.1 percent. Inflation in May was particularly caused by higher prices in the housing, water, electricity, gas and fuels component and the processed foods, beverages, cigarettes and tobacco component. Inflationary pressures particularly originated from Java, Indonesia's most populous island. Calender year inflation (January to May 2014) now stands at 1.56 percent. On a year-on-year basis, inflation rose from 7.25 percent in April to 7.32 percent in May 2014.

Historically, the month of May tends to bring deflation to Indonesia due to the impact of the harvesting season.

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}

Trade Balance

Whereas inflation was slightly higher then expected, Indonesia's trade balance recorded a staggering deficit of USD $1.97 billion in April 2014. Forecasts pointed to a low surplus or slight deficit. The April trade deficit is the country's widest deficit in nine months (although volume-wise, Indonesia still recorded a surplus of 31.80 million tons).

Export in April 2014 was recorded at USD $14.29 billion, thus declining by 2.63 percent from March 2014. On a month-to-month basis the weaker trade balance was particularly caused by a decline of crude oil exports (-26.7 percent), animal or vegetable fats and oils exports (-45.0 percent), as well as pearls, precious and semi precious stones exports (-23.2 percent). On a year-on-year basis, the deficit was mainly caused by a drop of rubber & related products exports (-17.0 percent), mineral fuels & mineral oil products exports (-13.8 percent) and crude oil exports (-11.0 percent).

Oil & gas exports in April 2014 declined 0.35 percent (mtm) or 0.92 percent (yoy) to USD $2.6 billion. Non-oil & gas exports in April 2014 fell 7.1 percent (mtm) or 3.0 percent (yoy) to USD $11.7 billion.

Meanwhile, imports in April 2014 reached the level of USD $16.3 billion, thus rising 11.9 percent from March 2014 but falling 1.3 percent from April 2013.

As a result of the April trade deficit, the Indonesian rupiah exchange had depreciated by 0.90 percent to IDR 11,781 per US dollar at 14.00pm local Jakarta time. The benchmark Indonesian stock index (kown as Jakarta Composite Index) lost 0.28 percent after the first trading session on Monday (02/06).

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}

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