Wednesday, 17 August 2016

US$598 million July Trade Surplus, Export-Import Performance Weaker

In World Economy News 17/08/2016

Indonesia’s trade balance in July was in surplus US$598.3 million. However, this performance was weak, as indicated by the decreasing value of exports and imports.
According to the Central Statistics Agency (BPS), the value of exports in July 2016 was US$9.5 billion, 26.7 percent down on the previous month (June 2016), and 17 percent lower than the value recorded in July 2015. Cumulatively, export value in the January-July 2016 period was US$79.1 billion, 12 percent lower than the same period last year.
BPS Chief Suryamin said the value of non-oil and gas exports in July 2016 was US$8.5 billion, down 27.8 percent on the previous month, and 15.2 percent lower than in July 2015.
The largest decrease in value in non-oil and gas exports was in jewellery exports, which amounted to US$ 290 million, down 45.14 percent on June 2016. The largest increase was recorded by iron and steel export, which amounted to US$125.3 million.
Oil and gas exports in July 2016 reached US$1 billion, 15.9 percent lower than the previous month. The largest decrease in oil and gas exports was in exports of oil derivatives, which declined 21.6 percent and exports of crude, which declined 26.2 percent. This reflects the sliding price of Indonesian crude on the global market.
On the other hand, imports in July 2016 were just US$8.92 billion, 26.3 percent down on the previous month, and 11.6 percent down on the same period last year. Non-oil and gas imports recorded the largest decrease of 27.9 percent compared with the previous month, to US$ 7.4 billion. This was the lowest value of non-oil and gas imports in the past year.
An increase in non-oil and gas import was recorded by the shipyards and floating structure sector. The largest decrease was recorded by machinery and mechanical equipment sector.
Separately, oil and gas imports in July 2016 reached US$ 1.547 billion, 16.84 percent down on the previous month, and 35.8 percent lower than July 2015.
By use category, all three categories of imported goods decreased in value. Import of consumer goods in July 2016 dropped 36.6 percent compared with the previous month. Meanwhile, import of raw materials/supporting goods and import of capital goods were down 24.4 percent, and 29 percent.
During the January-July 2016 period, imports of raw materials/supporting good and capital goods decreased in value by 12.2 percent and 15.2 percent compared with the same period in 2015. Import of consumer goods, meanwhile, rose 12.3 percent during the same period.
According to Suryamin, one of the main factors contributing to the weak export-import performance was the long holiday period at the beginning of July 2016. “We estimate that in July 2016, there were only 16 effective work days,” Suryamin said at a press conference in the BPS office on Monday (15/8).
The sluggish global economy had also affected Indonesia’s export-import performance. Non-oil and gas exports to the United States were the highest in July 2016, with a total value of US$990 million, followed by China (US$920 million), and Japan (US$820 million). The value of exports to these three countries accounted for 32.04 percent of total export value in July 2016.
Source: Katadata