JAKARTA (Reuters) - Indonesia’s exports fell the most in two-and-a-half years due to sliding oil and gas exports, but a big fall in imports helped the country post a trade surplus for the third month in a row.
Southeast Asia’s largest economy has been hit by weak global oil and commodities prices, while a falling rupiah has not yet given exports a boost but has dampened domestic consumption.
Exports in February dropped 16.02 percent from a year earlier, its largest fall since August 2012, data from the statistics bureau showed on Monday. Imports declined 16.24 percent. Economists in a Reuters poll had forecast exports would decline 7.60 percent and imports fall 6.80 percent.
“The 16 percent contraction in exports and imports is eye-catching, however prices add a distortion,” said Daniel Wilson of ANZ in Singapore.
“The firmer volume of imports, especially non-oil import volumes up 14.5 percent y/y year to date, suggests some firming of activity which is hidden in the headline contraction number.”
Oil and gas exports were down 24.1 percent on year through the first two months of the year, while oil and gas imports dropped 45.3 percent, data showed.
Most of Indonesia’s exports are commodities and with months of low global prices, shipments have been weak. A slowdown in big commodities importer, China, has also taken a toll with exports there in January-February falling more than 40 percent.
The rupiah IDR=ID, at 17-year lows, has not propped up exports so far as it has made imports of raw materials and capital goods more expensive, said Ahmad Erani Yustika, a professor at Brawijaya University in Malang, East Java.
“Theoretically a weak currency should help export competitiveness, but given that we produce things with imported raw materials, a weak rupiah actually increased costs and that affected exports,” Yustika told Reuters, adding it explains the contraction in both exports and imports in the past five months.
Imports in nearly all segments fell in February, with only grains rising, the statistics bureau said.
The government is going to issue a set of regulations soon aimed at supporting exports and curbing imports. Among the proposed regulations is a tax break for firms exporting 30 percent of their production and temporary anti-dumping duties that will be imposed on imported goods suspected of being dumped.
Indonesia posted a third straight monthly trade surplus of $738.3 million in February, helped by a large fall in imports, the statistics bureau said.
In 2014, Indonesia’s trade balance improved significantly, with the deficit more than halving to $1.88 billion from 2013.
Additional reporting by Adriana Nina Kusuma; Editing by Jacqueline Wong