Indonesian trade, inflation data show economy on the mend

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Indonesia has posted a robust monthly trade surplus while inflation eased in April, data showed Friday, in a sign Southeast Asia’s top economy is on the road to recovery.

The country was hit hard in 2013 as trade plunged to record deficit, the currency dived and inflation spiralled, but all three indicators have improved in recent months.

Trade stood at a surplus of $673.2 million in March — narrowing from the higher-than-expected $785 million posted in February thanks to a jump in palm oil prices and a slowdown in imports, but staying well out of trouble.

March exports rose 1.24 per cent year-on-year, while imports fell 2.34 per cent.

Inflation also eased in April to 7.25 per cent year-on-year from 7.32 in March as the price of gold fell and the harvest season boosted food supplies, statistics agency chief Suryamin, who goes by one name, told reporters.

David Chang, a director at UOB Kay Hian Securities in Jakarta, said there had been fears of economic instability in the run-up to Indonesia’s July 9 presidential election.

“But the easing of inflationary pressures mean we are unlikely to see a rise in interest rates, and the rupiah has strengthened, so the outlook is fairly positive,” Chang told AFP.

Economists have said, however, that the bank is unlikely to further loosen its stance as inflation is still well above its target range of 3.5 per cent to 5.5 per cent.

The signs of recovery follow a period of monetary tightening last year after a price hike in subsidised fuel triggered a spike in inflation and as the rupiah dropped, losing more than 20 per cent of its value by the year-end.

The central bank raised the benchmark interest rate by 1.75 percentage points from June last year, but has held it at 7.50 per cent since December.

Like many emerging economies, Indonesia was slammed last year by speculation the US Federal Reserve would start to wind down its stimulus programme, which had been credited with a rally in emerging markets since it was unveiled in late 2012.

The Fed began tapering its bond-buying in January and on Wednesday announced another widely-expected $10 billion cut to the programme.

 

 

 

Source : Channel News Asia | May 2, 2014

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About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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