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Darmin Nasution, Indonesia's Coordinating Economic Affairs Minister, is optimistic that gross domestic product (GDP) of Southeast Asia's largest economy can expand between 5.1 and 5.3 percent year-on-year (y/y) in the second quarter of 2017.
Based on statements of officials at Indonesia’s Trade Ministry, the USA started its investigation into the trade deficits the USA has with 16 countries, including Indonesia. Two months ago US President Donald Trump ordered this trade probe as part of his “America First” policy. Trump wants the USA to have the upper hand (meaning a trade surplus) in trade relations.
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).
After Standard & Poor's (S&P) assigned investment grade status to Indonesia's sovereign rating, hence boosting positive perceptions about the Indonesian economy, the government should use this momentum to encourage public and private investment to push macroeconomic growth to the targeted range of 5.4 - 6.1 percent year-on-year (y/y) in 2018.
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.
Indonesian Finance Minister Sri Mulyani Indrawati believes economic growth of Indonesia in 2017 can exceed the target that was set by the central government in the state budget. While the official target in the 2017 State Budget was set at 5.1 percent year-on-year (y/y), Sri Mulyani expects to see the growth rate at 5.2 percent (y/y) on the back of rising consumption and investment, while she predicts an end to the trend of falling imports and exports.
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.
Indonesia's exports of footwear to the United States (USA) are expected to reach the value of USD $1.5 billion in 2017, up 12 percent year-on-year (y/y) from USD $1.34 billion last year. This increase is expected to come on the back of US President Donald Trump's eagerness to limit imports from China by introducing higher tariffs. This policy should now open up opportunities for Indonesian footwear exporters.
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Food product exports from Indonesia to the Netherlands have increased according to Wim Jansen, Commercial Manager at NIVO Import & Export BV, Netherlands-based importer and exporter of Asian food products. About 45 percent of the company’s imports constitute food products from Indonesia, reaching a value of 3.5 million euro per year. Some popular Indonesian food products that are imported into the Netherlands are chili sauce, soy sauce, crackers (krupuk), various spices and noodles.
The Indonesian rupiah exchange rate continued to depreciate on Monday (02/03). According to the Bloomberg Dollar Index, Indonesia’s currency depreciated 0.30 percent to IDR 12,970 per US dollar, a six-year low. Apart from general bullish US dollar momentum in recent months (amid monetary tightening in the USA), the rupiah weakened due to Bank Indonesia’s signals that it tolerates a weaker currency in a move to boost exports (limiting the country’s current account deficit), and due to China’s interest rates cut.
The Customs Identification Number (NIK) in Indonesia is a personal identity number given by the Directorate General of Customs and Excise to users of customs services, such as importers and exporters. This customs number gives customs users the possibility to access or connect with the customs system. The registration of a Customs Identification Number is required in order to perform customs activities. Without such number trading companies are (in most cases) not able to perform import or export activities.
Although Indonesia’s economic growth slowed further in 2014, there is optimism that growth will accelerate in 2015 despite sluggish global economic conditions (curbing Indonesia’s export performance) and Bank Indonesia’s relatively high interest rate environment. Indonesia’s central bank has raised its BI rate several times over the past one and a half years in an effort to combat high inflation (caused by fuel price hikes), curb capital outflows ahead of US monetary tightening, limit the current account deficit and support the rupiah.
The trade balance of Indonesia improved in 2014. Over the whole year of 2014 Indonesia posted a USD $1.88 billion trade deficit, significantly better than the USD $4.08 billion deficit it recorded a year earlier. Today (02/02), Statistics Indonesia announced that Indonesia posted a USD $0.19 billion trade surplus in the last month of the year after having recorded a USD $0.42 billion trade deficit in the preceding month. The improved performance is mainly due to the country’s growing non-oil & gas surplus and narrowing oil & gas deficit.
An Import Identification Number (API) is required in case a company wishes to import goods into Indonesian territory. Without such number a company is not allowed to perform any import activities. Minister of Trade Regulation number 27/M-DAG/PER/5/2012 regarding Provisions on Importer Identification Number (API) as amended by Minister of Trade Regulation number 59/M-DAG/PER/9/2012 (Trade Regulation) regulates the types of API based on the intended use for the product imported.
Indonesia’s inflation pace accelerated in December 2014, exceeding estimations of analysts and Indonesia’s central bank. December inflation, 2.46 percent (m/m) or 8.36 percent (y/y), accelerated due to the impact of higher subsidized fuel prices (introduced in November) and volatile food prices (fluctuating rice and chili prices at the year-end). Other factors that contributed to high inflation in 2014 were higher electricity tariffs for households and industries, the higher price of 12 kg LPG, and an airfare adjustment.
Indonesia’s inflation reached 2.46 percent month-to-month (m/m) in December 2014 due to the impact of higher subsidized fuel prices implemented on 18 November 2014. On a year-on-year (y/y) basis, Indonesia’s inflation was recorded at 8.36 percent, slightly lower than the result in 2013 (8.38 percent). Inflation has been high in 2013 and 2014 as the Indonesian government raised prices of subsidized fuels in both years in an attempt to relieve fiscal pressures brought about by costly oil imports.
The Indonesia rupiah exchange rate appreciated slightly on Tuesday (02/12). By 12:50 pm local Jakarta time, the currency had appreciated 0.03 percent to 12,277 per US dollar according to the Bloomberg Dollar Index. Yesterday, Indonesia’s currency had depreciated to the lowest level since January 2014 after official government data showed that inflation had accelerated sharply, while exports contracted more than expected, implying that the country’s wide current account deficit remains troublesome.
After having recorded a trade deficit for several months, Indonesia finally posted a USD $20 million trade surplus in October 2014, according to data from the country’s Central Statistics Agency (BPS) released on Monday (01/12). Exports in October amounted to USD $15.35 billion, while imports were recorded at USD $15.33 billion. The improvement in Indonesia’s trade balance was mainly on the back of growth in the country’s non-oil & gas sector exports. This sector saw a surplus of USD $1.13 billion (up from USD $760 million in September).
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