JAKARTA • Hopes that Indonesia would end a long streak of declining exports and imports last month were shattered, as both tumbled on an annual basis during a month shortened by holidays.
Indonesia's statistics bureau yesterday said exports and imports were even worse than last year. Exports fell by 17.02 per cent and imports fell by 11.56 per cent.
July export and import values were at their lowest in any month since 2009, which the bureau attributed to only 16 effective working days in the month, due to Eid al-Fitr celebrations after the Muslim fasting month.
Statistics bureau chief Suryamin, speaking to reporters, said: "We think that aside from Eid al-Fitr, global demand was also low. If we look at China, its imports from all over the world were down 12 per cent in July." China is among Indonesia's biggest trade partners.
Oil and gas exports last month were particularly weak, plunging nearly 30 per cent from a year earlier. Indonesia reported a US$598.3 million (S$804 million) trade surplus for July.
Mr Rangga Cipta, a Samuel Sekuritas economist in Jakarta whose 5.9 per cent export contraction forecast was the lowest in the Reuters poll, said July trade data would affect Bank Indonesia's (BI) strategy to manage the rupiah exchange rate.
"In the middle of large portfolio inflows, BI will want to maintain the rupiah weaker than it should," he said, adding that the central bank would probably want to build its foreign exchange reserves.
July trade data also suggests that exports could continue to be a drag on economic growth in the third quarter, Mr Cipta added.
On Aug 4, Indonesia reported stronger-than-expected second quarter annual growth of 5.18 per cent, due partly to a moderation in how much export earnings contracted, as global commodity prices inched higher.