The Indonesian Employers Association (Apindo) proposes two strategies to boost Indonesia's export performance in 2017: (1) seek new export markets and (2) export 'halal' products (which adhere to Islamic law) to the Middle East. Last week Indonesia's Trade Ministry revised down its export target for 2017. The Ministry now expects Indonesia's export performance to grow 5.6 percent (y/y) to USD $136 billion this year (from an estimated USD $129 billion in 2016). The revision makes the nation's export target in line with the slow recovery of international demand.

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The slow recovery of global demand made Indonesia decide to revise down its export growth target for non-oil and gas products in 2017. Indonesian Trade Minister Enggartiasto Lukita said the government now targets a 5.6 percent year-on-year (y/y) growth in non-oil and gas exports (down from its earlier target of 11.9 percent y/y). This target is regarded as more realistic considering the slow recovery of international demand. To boost export growth in 2017 the government aims to diversify export markets as well as to, simply, export more products to existing export markets.

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Indonesia's Statistics Agency (BPS) announced on Thursday (15/12) that the nation's export performance in November 2016 showed a sharp increase. Sasmito Hadi Wibowo, Deputy for Statistics Distribution and Services at BPS, said Indonesia's export growth was "rather spectacular" and gives rise to optimism that global demand and trade have improved. In November Indonesia posted a USD $838 million trade surplus, down from the revised USD $1.24 billion in the preceding month. In all of the first eleven months of 2016, Indonesia recorded a trade surplus.

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Indonesia recorded a USD $1.21 billion trade surplus in October 2016 according to the latest data from the nation's Central Statistics Agency (BPS). In line with expectations both exports and imports rose last month supported by rising commodity prices (hence boosting the country's export performance) and an increase in machinery and electrical appliance imports into Indonesia. Meanwhile, BPS revised September's trade surplus to USD $1.27 billion, from USD $1.22 billion reported last month.

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Indonesia's Statistics Agency (BPS) announced that the nation's trade surplus improved to USD $1.22 billion in September 2016, the highest monthly surplus over the past 13 months. The rising surplus was primarily the result of a growing non-oil & gas trade surplus. However, both Indonesia's exports and imports contracted on an annual basis. But because imports declined more rapidly, Southeast Asia's largest economy managed to record a solid trade surplus in September, beating analysts' estimates, by far (that averaged around USD $450 million).

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Eight commodity prices have been rising steadily so far this year on higher global demand. This rebound is expected to continue into 2017 although it will require a long time to touch the levels that we saw in 2011. The World Bank noted in a report released on 4 October 2016 that the prices of eight commodities - coal, crude oil, crude palm oil, copper, iron ore, tin, nickel and gold - have been rebounding so far this year. Rising commodity prices will support economic growth of Indonesia as Southeast Asia's largest economy is one of the world's largest commodity exporters.

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Indonesian entrepreneurs say their credit demand is limited due to few expansion and investment plans ahead of the end of the year. Although the Indonesian economy is recovering - reflected by accelerated GDP growth figures in the first two quarters of the year - demand from abroad for Indonesian products remains weak, while domestic demand remains somewhat subdued as well (reflected by the nation's structurally weakening export and import figures over the past 15 months). As a result credit growth has been slowing accordingly.

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Although at a slower pace, Indonesia's exports and imports continued to contract in August 2016. In August Indonesia exported USD $12.63 billion worth of goods down 0.75 percent on a year-on-year basis (much better than analysts had forecast). Meanwhile, Indonesia imported USD $12.34 billion worth of goods in August, down 0.49 percent (y/y). As such, the trade balance in August showed a USD $293.6 million surplus. However, Indonesia's Statistics Agency (BPS) added that it was the 23rd month of declining imports and exports for Indonesia.

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Indonesia's Statistics Agency (BPS) announced on Monday (15/08) that the trade balance of Indonesia showed a surplus of USD $598 million in July 2016, down from a USD $879.2 million surplus in the preceding month and considerably below analyst forecasts. Although Indonesia, Southeast Asia's largest economy, booked a USD $4.2 billion trade surplus in the first seven months of 2016, concern about Indonesia's weakening exports and imports persist. Faster falling imports (compared to exports) explains the trade surplus.

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Indonesia's latest trade data beat forecasts by quite a distance. According to Statistics Indonesia (BPS), Indonesia's trade balance recorded a monthly surplus of USD $900.2 million in June 2016. Previously, median forecasts expected a USD $300 million surplus. Meanwhile, the nation's trade surplus more than doubled in June from the monthly surplus in the preceding month, supported by strong exports of electronics, auto parts, finished garments, and rubber products. Despite this positive result, there remain some concerns.

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Last week, president Susilo Bambang Yudhoyono extended the moratorium on new permits to convert natural forests and peat lands for a further two years. In 2011, Indonesia's government signed the two-year primary forest moratorium that came into effect on 20 May 2011 and expired in May 2013. This moratorium implies a temporary stop to the granting of new permits to clear rain forests and peat lands in the country. The moratorium particularly aims to limit Indonesia's quickly expanding palm oil industry.

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Although the United States continues its traditional focus on direct investments in developed countries, primarily in Western Europe, there has been a significant rise in US investments in Indonesia in recent years. Whereas US investments in the developed economies of Western Europe is mostly found in the financial sector and through holding companies, in developing Asia, the US is more focused on the manufacturing sector due to lower production costs. In the last two years, the US emerged as the second-largest investor in Indonesia after Japan.

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Indonesia's central bank (Bank Indonesia or BI) announced on Wednesday (15/05/13) that the country's external balance has improved during Q1-2013 as non-oil and gas trade were up. Indonesia's current account deficit stood at USD $5.3 billion (2.4 percent of GDP) in Q1-2013, compared to the previous quarter's deficit of USD $7.6 billion (3.5 percent of GDP). Indonesia has experienced a widening trade deficit, although it recorded a trade surplus of USD $304.90 in March, the first trade surplus since September 2012.

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The latest World Bank report of East Asia and the Pacific states that "driven by strong domestic demand, economies of developing East Asia and Pacific continue to be an engine of global growth, growing at 7.5 percent in 2012 - higher than any other region in the world." Amid a recovering global economy the report projects that regional growth will rise to 7.8 percent in 2013 and ease to 7.6 percent in 2014.

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The central bank of Indonesia (Bank Indonesia, or BI) decided to maintain its record low policy rate for the 15th straight month at 5.75 percent as it is considered consistent with its inflation target range of 3.5-5.5 percent in 2013 and 2014. The central bank also stated that the global economic recovery is accompanied by many uncertainties which result in a lower forecast for Indonesia's economic growth. The full press release of Bank Indonesia can be read below.

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Yesterday, Statistics Indonesia (BPS), a non-departmental government institution, released Indonesia's export and import numbers of February 2013. Indonesia's imports reached US $15.32 billion, while its exports stood at US $14.99 billion. It has thus resulted in the continuation of a trade deficit (US $327.4 million). For Indonesia, which always reported trade surpluses until last year, it is a worrying scenario as the trade deficit and higher inflation put pressure on the IDR rupiah.

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This week, the World Bank published its Indonesia Economic Quarterly (IEQ, edition March 2013) titled 'Pressures Mounting'. It reports on key developments over the past three months in Indonesia’s economy, and places these in a longer-term and global context. To read the whole report, please visit the World Bank's website at www.worldbank.org or download this edition directly through this link. Below we present the executive summary.

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The chairman of the Indonesia Coal Mining Association said that Indonesia's coal exports are expected to increase from 310 million tons in 2012 to 330 million tons in 2013, a 6.5 percent increase. Coal producers have been facing a tough period since July 2008 when global coal demand weakened and triggered volatile - but mostly declining - coal prices ever since. Coal demand from China and India, however, is expected to increase this year.

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