Economic Highlights:
Exports Continue to Improve while Imports Remain Weak
Exports Continue to Improve while Imports Remain Weak
¨ Indonesia’s exports
contracted by a smaller magnitude of 4.4% y-o-y
in Jun,
from -9.7% in May. This was driven by smaller
declines in both oil & gas and non-oil & gas exports, reflecting a
slight pick-up in demand for Indonesia’s exports during the month.
¨ Imports,
meanwhile, contracted by a larger magnitude of 7.4% y-o-y in Jun, from
-4.1% in May, suggesting economic activities remained soft in 2Q. The
sharper contraction in imports was due to a deeper drop in the non-oil &
gas and a reversal into a contraction of crude oil imports. These were,
however, partly offset by
a smaller contraction in oil products and gas imports.
¨ In June, the trade account continued to record a surplus of USD0.9bn, higher than the previous month. This resulted in a higher trade surplus in 2Q 2016, suggesting the country’s current account deficit (CAD) in the balance of payments could improve during the quarter. However, higher seasonal primary income deficit could offset the improvement in trade balance.
¨ Moving forward, the global economy still faced with many downside risks and it is in its seventh year of growth in the current cycle in 2016 where the late stage of an economic growth cycle tends to be associated with higher downside risk. This suggests that Indonesia’s exports will likely remain challenging and we expect the country’s real exports to grow marginally by 0.9% in 2016, compared with -2.0% in 2015.
¨ In June, the trade account continued to record a surplus of USD0.9bn, higher than the previous month. This resulted in a higher trade surplus in 2Q 2016, suggesting the country’s current account deficit (CAD) in the balance of payments could improve during the quarter. However, higher seasonal primary income deficit could offset the improvement in trade balance.
¨ Moving forward, the global economy still faced with many downside risks and it is in its seventh year of growth in the current cycle in 2016 where the late stage of an economic growth cycle tends to be associated with higher downside risk. This suggests that Indonesia’s exports will likely remain challenging and we expect the country’s real exports to grow marginally by 0.9% in 2016, compared with -2.0% in 2015.
Kindly click the following link for the full report: Exports Continue to Improve while Imports Remain Weak
Best regards,
Rizki Fajar
Vice President
Economist
PT. RHB Securities
Indonesia
