Export Turnaround
In the past few months, Indonesian exports have shown signs of a turnaround. While exports had been showing declines since 2012, in the past few months we have seen export figures that have been growing year over year. This turnaround has been accompanied by the increase in commodities prices. At the same time China has once again started to lead the ranks as a monthly export destination.
The turnaround has only taken place since August last year, with the year-over-year rise in non-oil exports. This was followed by an increase in total exports two months later. Therefore, in terms of the annual export figure, total exports in 2016 still showed a decline compared to total exports of the previous year. Total exports in 2016 were reported at $144,433.5 million, lower by 3.95% compared to 2015 at $150,366.3. Similarly, total non-oil exports in 2016 were also lower than in 2015. Non-oil exports in 2016 stood at $131,346.5 million, while in 2015 they were $131,791.9 million, only slightly lower, by $446.4 million or 0.34%.
As mentioned earlier, the turnaround in the exports was partly due to the increase in the prices of commodities, especially coal, palm oil, rubber and other commodities. Exports of palm oil, for instance, have shown steady increases since August 2016, as have exports of coal and rubber. Fortunately, these increases were also accompanied by exports of manufactured products. Therefore, the increase in total exports seems to be broad based.
This turnaround was confirmed by the latest monthly export figures. In December 2016 Indonesian exports reached $13,772.4 million, up 1.99% from the previous month. However, compared with the same period of the previous year, exports increased by 15.57%. At the same time, Indonesian imports also experienced an increase of 0.88% to reach $12,780.3 million. The trade balance was in surplus of $992.1 million. With this latest monthly surplus, the Indonesian trade balance has been continuously in surplus for the last 12 months and reached $8,782.8 million for the entire year.
In the domestic economy, the month of December 2016, in the midst of a festive season, was marked by relatively mild inflation, at 0.42%. Yearly inflation in December 2016 was 3.02%, below the low end of the target corridor of the Central Bank. For that reason, and at the same time in the mode to stimulate the economy, Bank Indonesia kept its benchmark rate, the seven-day reverse repo rate, at 4.75%.
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