Peaceful Holiday
Eid Mubarak is always the largest holiday in Indonesia. Celebrated after one full month of fasting, the holiday is usually filled with various celebrations, but at its center is the Homecoming Tradition, in which literally millions of people travel back to their hometowns.
During this holiday season, the spending level of the people usually hits its peak, requiring companies to prepare inventory stock for their products in order for stores not to run out in the midst of high demand. Therefore, two months prior to the holiday factories work around the clock, shipping their products to stores preparing for the big day. Because of this, raw materials that must be imported should enter Indonesia between two to three months before the holiday. This has become a ritual for the Indonesian economy.
In this year's holiday, the Homecoming Tradition was managed better than in the previous year. People could reach their hometowns with less hassle. At the same time, prices of basic commodities were also found to be relatively stable. The efforts of many government workers facilitated the homeward-bound flow, as well as the logistical traffic, resulting in more stable prices.
In the midst of these festivities, the Indonesian Central Board of Statistics issued a relatively sanguine trade balance for the month of May 2017, even though the level of the trade surplus was lower than the previous month. Total exports in May were reported higher than the previous month, but imports in May were also sharply higher. The trade surplus for May 2017 was $474 million, sharply below the $1,334 million for April.
At the same time Indonesian inflation in May was 0.39%, relatively mild for the month preceding the big holiday. However, year-over-year inflation was still in the inflation corridor. Therefore, even though there was an increase in the benchmark interest rate in the United States, Bank Indonesia kept its benchmark rate constant at 4.75%.
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