ASEAN KEY DESTINATIONS
Indonesia’s trade surplus highlights export pressures
INDONESIA’S unexpectedly large trade surplus in the first quarter will help narrow the country’s current account deficit but points to weak exports that will drag on economic growth.
Exports from Southeast Asia’s largest economy have been hit by falling commodity prices, while a weak rupiah has not boosted the competitiveness of manufactured exports due to rising costs at home.
Indonesia’s trade surplus totalled US$2.43 billion in the first quarter, the statistics bureau said on Wednesday - the biggest in three years.
But the surplus, which was more than twice the size of the US$1.07 billion surplus in the first three months of 2014, was derived from a deep contraction in both exports and imports.
“This (surplus) is likely to be a positive for market sentiment, given lingering concerns of current account balance this year,” said Gundy Cahyadi, economist with DBS Bank in Singapore, noting that it comes alongside poor export growth.
Annual March exports fell 9.75 per cent and imports dropped 13.39 per cent, both sliding for the sixth straight month. But the declines were less than what economists expected in a Reuters poll of 15.40 per cent and 15.62 per cent, respectively.
The country’s US$1.13 billion surplus in March was also better than expectations for a surplus of US$620 million.
The rupiah stood at 12,975 per dollar after the data, barely changed against its previous close.
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