Indonesia posted a robust trade surplus in November last year, data showed yesterday, in a sign of recovery in Southeast Asia’s biggest nation that was plunged into economic turmoil last year.
Jakarta is set to welcome the news as the government battles a deep current account deficit and poor trade performance, soaring inflation and a slump in the rupiah’s value.
The November trade surplus of US$776.8 million, up from October’s modest US$24.3 million surplus, is the country’s highest since April 2012, and marks a major upswing since a record deficit of US$657.2 million in September.
Indonesian Central Statistics Agency head Suryamin, who goes by one name, said that the recovery came thanks to an improvement in countries buying Indonesian exports, while the weak rupiah also made goods cheaper abroad.
However, the overall trade balance for January to November last year is still in a substantial deficit of US$5.6 billion.
Manufacturing also improved, according to HSBC’s purchasing managers’ index, which rose to 50.9 last month from 50.3 in November, showing a rise in domestic demand. A reading above 50 indicates expansion.
Prices rose 8.38 percent year-on-year last month, up slightly from 8.37 percent in November, but inflation was almost double the 2012 rate of 4.3 percent and well above the central bank’s usual target range of 3.5 percent to 5.5 percent.
“Inflation was a result of an increase in food prices during Christmas and New Year, higher cooking gas prices and distribution costs brought about by a hike in the fuel price,” Suryamin said.
The rupiah lost 20 percent of its value against the US dollar last year and is considered one of Asia’s most vulnerable currencies, pushed down by Indonesia’s current account deficit, which sat at 3.8 percent of GDP in the third quarter.
The government and central bank have moved to shore up the economy in recent months, especially as the US Federal Reserve scales back its monetary stimulus program, which has led to an outflow of cash back to the West.
Indonesia has enjoyed a prolonged boom in recent years, clocking up annual growth of more than 6 percent, but analysts predict that last year’s growth figures will be at the lowest in four years.