JAKARTA: Indonesia's exports and imports performed better than expected in August, but the trade numbers show persistently weak growth for South-East Asia's biggest economy.
Exports fell 12.3% from a year earlier, less than the 17.4% drop seen in a Reuters poll and July's 18.8% skid. Imports declined 17.1%, less than the poll's forecast of 23.7% and July's 28.4% plunge.
The trade surplus narrowed to US$430 million from July's US$1.38 billion. The poll projected an August surplus of US$630 million.
August became the ninth straight month with a trade surplus, but that's not a cause for joy as it stems from the poor import numbers, which reflect how weak domestic demand remains. Imports have had double-digit annual declines every month this year.
Exports, meanwhile, have declined for 11 straight months, as weak global demand exacerbated by a slowdown in China and low global commodity prices.
The statistics board said that this year the United States has overtaken China as the biggest buyer of Indonesia's non-oil exports.
Falling export revenue and a currency trading at 17-year lows have hit the country's purchasing power.
The statistics bureau said on Tuesday that the country's poverty rate increased to 11.22% as of March, from 10.96% in September 2014.
Ina Primiana, an economics professor at Universitas Padjajaran in Bandung, said the prolonged drop in imports shows a growing number of factories "can't even afford to buy the raw materials, and they're laying off people".
In the second quarter, Indonesia's gross domestic product (GDP) grew at its slowest annual pace in six years, 4.67%.
The government maintains that 5% growth remain achievable this year, though many economists feel it will be below for the first time since 2009.
The August trade numbers came out two days before a policy meeting of Bank Indonesia. All analysts in a Reuters poll expect another hold for its benchmark at 7.5%, particularly as the meeting takes place only hours before an intensely-awaited US Federal Reserve meeting. - Reuters
Limited time offer:
Just RM5 per month.
