World Economy

Indonesia Trade Growth Slows

Indonesia Trade Growth SlowsIndonesia Trade Growth Slows

Indonesia’s exports and imports grew more slowly than expected in April, while the country’s trade balance was smaller than a month before, the statistics bureau said on Monday.

Southeast Asia’s largest economy had a $1.24 billion trade surplus in April, the bureau said, more than the $860 million a Reuters poll had forecast, but smaller than the revised $1.39 billion for March.

Imports rose 10.31% from a year earlier to $11.93 billion in April. The poll’s median forecast was for a 21.56% annual growth rate. The bureau said imports of consumer goods rose nearly 26% on a yearly basis. Increases in imports of capital goods and raw materials were smaller.

Exports rose 12.61% to $13.17 billion in April, versus the poll’s forecast of 22.45%. Both exports’ and imports’ value in April were below that of March.

Meanwhile, Indonesia’s statistics bureau on Monday revised up its figures for March exports and trade surplus, but revised down its imports calculation for the month.

The March trade surplus was amended to $1.39 billion, as opposed to the $1.23 billion the bureau reported a month ago.

Exports from Indonesia were worth $14.68 billion in March, up from the initial report of $14.59 billion. Imports for last month were revised to $13.29 billion from $13.36 billion.

Indonesia has had a trade surplus for every month since the start of 2016.

 Inflation Up

Indonesia’s annual inflation rate rose in April to the highest in 13 months, the statistics bureau said, which was more than expected in a Reuters poll.

The consumer price index rose 4.17% on a yearly basis in April, the quickest pace since March 2016. A Reuters poll had forecast an annual rate of 4.08%. March’s headline inflation rate was 3.61%.

On a monthly basis, consumer prices picked up 0.09%, mainly because of rising electricity tariffs. Core inflation, which excludes government-controlled and volatile food prices, was at 3.28% in April. The poll had expected a rate of 3.35%.

Indonesia’s central bank targets annual inflation to be between 3% and 5% this year. Its next policy review is on May 17-18.

Bank Indonesia projects May’s inflation at 0.27%. This is based on a survey BI held in 82 cities in the second week of the month. On an annual basis, May’s inflation is estimated at 4.12%. “This is still in line with the government’s and BI’s target,” BI governor Agus Martowardojo said last week.

Despite an inflation rate that is still within the government’s target, there are pressures to keep an eye on, Agus said. The potential for price hikes increases nearing the fasting month of Ramadan.

The government must mitigate volatile food prices at around 4% to maintain inflation from going up. This can be done by improving distribution and market supervision.

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