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Indonesia's trade surplus larger than forecast as imports slump
[JAKARTA] Indonesia registered a far larger trade surplus than forecast in May, as a 42 per cent decline in imports outweighed a larger-than-expected drop in exports.
The trade surplus was US$2.1 billion, the statistics office said on Monday, compared to the US$629 million surplus forecast in a Bloomberg survey of economists. Imports fell for an 11th straight month, underscoring concerns about the health of an economy that relies heavily on consumer spending.
The drop in imports exceeded the median estimate of a 25 per cent decline. Imports of consumer goods fell 39.8 per cent, while incoming shipments of raw materials dropped 43 per cent and capital goods by 40 per cent.
Exports fell 29 per cent from a year ago, worse than the 19.6 per cent decline survey forecast. That was mainly driven by oil and gas, with shipments down 42.6 per cent from a year earlier, and manufacturing, which was down 25.9 per cent. Agricultural exports fell 25.5 per cent.
Partial lockdowns to curb the virus have hurt demand and economic growth. The government now expects gross domestic product to grow 2.3 per cent this year, down from a previous forecast of 5.3 per cent, and has warned it even could contract by 0.4 per cent in a worst-case scenario.
The trade data may put further pressure on Bank Indonesia to lower borrowing costs to support growth. The central bank will announce its rate decision on Thursday after leaving rates unchanged in April and May. The trade surplus for the first five months of the year stood at US$4.3 billion.