* March trade surplus $670 mln vs $500 mln seen by analysts
* Exports +1.24 pct y/y vs -1.3 pct expected by analysts
* Rupiah touches session high after trade data
* April inflation at 7.25 pct y/y, matching expectations
* GDP Q1 y/y seen at +5.60 pct, vs +5.72 pct in Q4
(Adding comments on GDP)
By Adriana Nina Kusuma and Rieka Rahadiana
JAKARTA, May 2 Indonesia on Friday reported a
larger-than-expected trade surplus and a further slowing in
inflation, brightening the picture for Southeast Asia's biggest
The data came ahead of a report on Monday expected to show
the economy grew an annual 5.60 percent in the first quarter,
according to a Reuters poll, a touch slower than 5.72 percent in
the prior quarter but within the central bank's target of
5.5-5.9 percent this year.
The upbeat results suggest the economy began the year on a
steady footing, after growth hit a four-year low in 2013 on a
slowdown in exports and consumption.
"We are looking for a 1Q real GDP growth print of around 5.6
percent (year-on-year), driven by a combination of weak
investment growth but resilient private consumption spending,
thanks to pre-election spending," Credit Suisse said in a
Indonesia had a trade surplus of $670 million in March, the
statistics office said, more than the $500 million surplus
expected by analysts though narrowing from $840 million in
Exports unexpectedly rose 1.24 percent from a year earlier,
bolstered by stronger palm oil shipments and demand from China
and Japan. The median forecast of analysts was for a drop of 1.3
percent. It was the first increase since December.
Imports fell 2.34 percent, less than expectations for a 4.5
percent year-on-year decline.
The rupiah rose 0.3 percent to 11,520 per dollar
after the trade data.
The import data, however, can be a double-edged sword. The
smaller-than-expected decline underscores resiliency in consumer
spending, yet policymakers are aiming to lower imports in an
effort to combat the country's current account deficit.
On a month-on-month basis, imports rose 5.42 percent, with
demand for fuel particularly strong amid robust demand for autos
among middle class consumers.
The G20 economy is taking further steps to dampen imports
and help ease the current account deficit. In April, the
government hiked the luxury tax for high-end cars to 125 percent
from 75 percent, and local media reported that the government is
also eyeing a luxury tax on smartphones.
First-quarter data on the current account - the widest
measure of the flow of goods, services and money in and out of
the country - is due out on May 9. The central bank has
estimated a current account deficit of around 2 percent of gross
domestic product in the quarter.
The deficit was at 3.3 percent in 2013 and hit a record 4.4
percent in the second quarter last year. That prompted Bank
Indonesia to hike its key reference rate by a massive 175 basis
points between June and November to help defend the sliding
rupiah and restore investor confidence.
The central bank has stood pat since then, and Friday's
inflation data may give it room to keep rates steady again at
its policy meeting on May 8.
The consumer price index rose 7.25 percent year-on-year in
April, slowing from a 7.32 percent rise in March, as food prices
declined at the start of the harvest season. The result matched
the median estimate in a Reuters poll and marked the third
straight month of easing inflation.
Core inflation, which excludes administered prices and
volatile food prices, was at 4.66 percent, little changed from
4.61 percent a month earlier.
For 2014, the bank has said it expects inflation between 3.5
percent and 5.5 percent, much lower than 8.38 percent last year.
The low end of that estimate would be the lowest since February
Still, Bank Indonesia Governor Agus Martowardojo said on
Wednesday that monetary policy would remain tight for the rest
of the year, signalling no rate cuts are on the horizon as it
stays vigilant on the risk of capital outflows from U.S.
(Additional reporting by Nilufar Rizki; Editing by Chris