Indonesia swung to a trade deficit in January as a controversial government ban on mineral ore shipments by Southeast Asia’s biggest economy crimped overall exports, data showed on Monday.
The January deficit of $431 million compared to a $1.5 billion surplus in December, the official Statistics Agency said.
“The 5.75 per cent drop in exports is due to the annual pattern and the coming into effect of the mineral law,” said Adi Lumaksono, a senior official at the agency.
Indonesia imposed a ban on exports of mineral ore including bauxite, nickel and copper beginning January 12.
The move is one of a series of industrial policies pushed by nationalist politicians who argue foreign firms reap an inordinate share of the profits from exploiting resources and business opportunities in the fast-growing economy.
The mineral export ban contributed in December to Indonesia’s biggest trade surplus in two years as mining firms ramped up exports to key markets like China ahead of the impending ban.
The January deficit is Indonesia’s first monthly shortfall since September.
However, inflation eased in February, the agency said Monday, the latest sign the economy was stabilising after a rough 2013.
Inflation came in at 7.75 per cent, lower than analyst estimates, and compared to 8.22 per cent in January.
Indonesia was hit hard last year by expectations the US Federal Reserve would start to wind down its economic stimulus programme, which analysts said could cause investment capital to exit emerging markets.
Meanwhile, HSBC’s manufacturing purchasing managers index — a gauge of future manufacturing activity — expanded for the sixth straight month in February albeit at a slower rate than in the previous month, the bank said.
Source : Channel News Asia | March 3, 2014