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Indonesia's Statistics Agency (BPS) announced Indonesia's trade surplus stood at USD $474 million in May 2017, significantly below analysts' estimates and the revised April 2017 trade surplus of USD $1.33 billion. Key reason that explains Indonesia's lower trade surplus is rising imports ahead of the Ramadan (the Islamic fasting month) and Idul Fitri celebrations (the festivities that follow after the end of Ramadan).
Italian consumers can now enjoy fresh pineapples from Indonesia after the first container - containing 18 tons of Indonesian pineapples - arrived in the port city of Venice on 9 June 2017. The export of fresh pineapples is done by Great Giant Food in cooperation with Italian importer SAMA SpA (which plans to import up to 20 containers from Indonesia before the end of 2017). Previously, Italian consumers could only enjoy pineapple that was packed in a can.
Indonesia's export performance tumbled 10.3 percent month-to-month (m/m) to USD $13.17 billion in April 2017. Suhariyanto, Head of Statistics Indonesia (BPS), attributed this decline to a steep 35.4 percent (m/m) decline in exports of oil and gas products. Nearly all components in the oil and gas balance were plagued by declining prices. However, also in terms of volume these oil and gas exports tumbled, implying weakening global demand for energy (perhaps a sign the Chinese economy remains in slowdown-mode).
Based on the latest data from Indonesia's Statistics Agency (BPS), released on Monday morning (15/05), Indonesia's export and import performance in April 2017 slightly weakened compared to the performance in the preceding month but remains in much better shape than it was in April one year ago. The nation's April trade surplus is USD $1.24 billion, smaller than the revised USD $1.39 billion surplus in the preceding month but still exceeding analysts' forecasts.
Indonesia reported good trade data on Monday (17/04). Indonesia's Statistics Agency (BPS) announced the nation's exports were worth USD $14.59 billion in March 2017, up 23.55 percent from the same month one year earlier (and the biggest rise since August 2011), on the back of growing oil and gas shipments. Moreover, the pace of Indonesia's export growth in March was nearly two times faster compared to growth recorded in the preceding month as well as the forecast of most analysts.
US Vice President Mike Pence plans to visit Indonesia next week. Indonesia is Pence's third stop during his April 15-25 Asia-Pacific tour. Aim of this short tour is to safeguard and enhance good relations with several Asia-Pacific nations, including Indonesia, as well as boosting regional security cooperation. However, there is plenty of resistance to Pence's visit to Indonesia. Some say he could better cancel the visit as the visit would put the Indonesian government in an awkward position.
Indonesia Statistics (BPS) announced on Wednesday (15/03) that Indonesia's exports and imports grew at a slower pace in February 2017 (compared to the preceding month). This performance was in line with expectations. While Indonesia's exports grew 11.16 percent year-on-year (y/y) to USD $12.57 billion in February 2017, its imports grew 10.61 percent (y/y) to USD $11.26 billion over the same period.
Considering ongoing uncertainty about the future of the Trans Pacific Partnership (TPP) after US President vowed to exit this trade deal, Indonesia is eager to find other strategies to boost Indonesia's export performance. The Indonesian government therefore plans to boost trade with the other 20 countries that are part of the Indian Ocean Rim Association (IORA). Total trade among these IORA nations reached USD $777 billion in 2015. Indonesia joined the IORA in 1997. However, the trade potential posed by this block has not been tapped optimally yet by Indonesia.
Due to rising commodity prices Indonesia saw its export performance surge in January 2017. According to the latest data from Indonesia's Statistics Agency (BPS), Indonesia's exports grew 27.71 percent year-on-year (y/y) to USD $13.38 billion from the same month one year earlier, the fastest pace of export value growth since September 2011 and also exceeding analysts' estimates. This export growth was particularly attributed to higher prices of coal and crude palm oil (CPO).
The central bank of Indonesia (Bank Indonesia) expects the nation's current account deficit to widen to 2.4 percent of gross domestic product (GDP) in 2017 due to expectation of rising imports in Indonesia this year. These rising imports come on the back of growing investment realization in Southeast Asia's largest economy. This projection is significantly higher compared to the estimated USD $17 billion, or 1.8 percent of GDP, current account deficit in 2016.
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The economic stabilisation policies launched by Indonesia's central bank (Bank Indonesia) and the Indonesian government in recent months have brought a steady improvement in the country's current account balance. The current account deficit moderated from the previous quarter’s record USD $9.9 billion (equivalent to 4.4 percent of the country's GDP) to USD $8.4 billion (3.8 percent of GDP) in the third quarter of 2013. A shrinking current account deficit is highly awaited by investors. The text below is the official press release of Bank Indonesia.
Despite rising concerns about the slowing pace of the Indonesian economy, the deputy minister of Finance Bambang Brodjonegoro reminded investors that Indonesia's economic growth in the third quarter of 2013 still constitutes one of the highest growth rates around the globe. Economic expansion in Q3-2013 slid to 5.6% in Southeast Asia's largest economy. With the exception of China (7.8% GDP growth in Q3-2013), Indonesia's growth continues to outpace growth in other emerging markets, such as Brazil (3.3%) and Turkey (4%).
Indonesia's October inflation rate was well-received by investors. On Friday (01/11), Statistics Indonesia (BPS) announced that the country's inflation in October 2013 grew 0.09 percent. Easing inflation was mainly due to falling prices of raw foods and clothes. Year-on-year (yoy), however, Indonesia's inflation is still high at 8.32 percent, although showing a moderating trend from 8.40 percent (yoy) in September 2013 and 8.79 percent (yoy) in August 2013. Inflation had skyrocketed after subsidized fuel prices were raised by an average 33 percent in June.
On 12 October 2013 Finance Minister and Central Bank Governors from Korea and Indonesia agreed to establish a bilateral KRW/IDR swap arrangement in the near future. The size of the swap arrangement is up to KRW 10.7 trillion/IDR 115 trillion (equivalent to USD $10 billion). The effective period of the facility will be three years, and could be extended by agreement by both sides. This Bilateral Currency Swap Arrangement (BCSA) aims to promote bilateral trade and further strengthen financial cooperation, an objective of mutual interest to both countries.
The World Bank has revised down its forecast for economic growth in Indonesia in 2013 to 5.9 percent from its original estimate of 6.2 percent. Similarly, the institution has altered its forecast for economic growth in 2014 from 6.5 percent to 6.2 percent. The revised figures were published in July's edition of the Indonesia Economic Quarterly (IEQ), titled 'Adjusting to Pressures'. The World Bank's forecast is also in sharp contrast with the GDP assumption of the Indonesian government, which puts economic growth in 2013 at 6.3 percent.
Indonesia and Sweden intend to increase business relations between both countries. Last month, Indonesia's president Susilo Bambang Yudhoyono made a state visit to Sweden, while in 2012 Sweden prime minister Fredrik Reinfeldt visited Indonesia. A number of topics were discussed during these visits, including trade and investment. After the discussions, both countries agreed that trade and investment between the countries should be expanded. Up to early 2013, 77 Swedish companies are in operation in Indonesia.
Indonesia already is a strong trade partner to a number of countries in Europe. Based on data released by Indonesia's Ministry of Trade, the Netherlands and Spain are two European countries that import a considerable amount of Indonesian products and thus are important contributors to Indonesia's trade surplus in the non oil & gas sector. But other European nations, such as Germany and Russia, pressure Indonesia's trade surplus. It indicates that, despite the wide distance, Indonesia and Europe have a close and valuable trade relationship.
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.
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.
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.
