Indonesia swung to a higher-than-expected trade surplus in February as a jump in palm oil prices and slowdown in imports boosted Southeast Asia’s top economy, official data showed Tuesday.
The surplus of $785.3 million came after a $431 million deficit in January caused by a controversial ban on mineral ore shipments that hit exports.
Economists had expected a surplus of around $420 million.
Inflation also eased in March, and both indicators add to signs in recent months that the economy has stabilised after being hard hit by emerging market turmoil last summer.
The price of crude palm oil rose about four per cent in February, according to data from the national statistics agency.
Indonesia is the world’s biggest producer of the commodity, which is used in numerous everyday goods from biscuits to shampoo.
Imports fell nearly 10 per cent on year to $13.78 billion, the data showed.
“The trade surplus was beyond our expectation and we believe it was helped by the high (palm oil) prices and a decline in imports,” said Bank Central Asia economist David Sumual.
Inflation eased to 7.32 per cent in March from 7.75 per cent in February due to cheaper food costs, the data showed, continuing a recent downward trend after a surge last year sparked by a fuel price hike.
However, the figure is still above the central bank’s target of 3.5-5.5 per cent.
The data is positive news for the economy after speculation the US Federal Reserve would start to wind down its economic stimulus programme prompted huge falls in the Jakarta stock market and rupiah last year.
Both the currency and stocks have also recently regained strength but the central bank warned last month economic growth was still at risk of further tapering and a slowdown in China.
Analysts have said the bank may face pressure to cut rates from the present 7.5 per cent in coming months, as the country holds nationwide legislative and presidential elections.
Slightly offsetting the news, HSBC’s manufacturing purchasing managers index — a gauge of manufacturing activity — narrowed further in March to 50.1, from 50.5 in February, with the bank blaming a slowdown in domestic demand. A figure above 50 points to growth while anything below indicates contraction.
Source : Channel News Asia | April 1, 2014