Chief Economic Minister Says Trade Surplus Not To Last Long

Jakarta (Antara Bali) - Chief economic minister Sofyan Djalil said here on Monday that the US$0.95 billion trade surplus Indonesia enjoyed in May would not last long as imports would increase.

"Soon the surplus will vanish and we may even suffer a deficit because we are conducting development efforts and import capital goods while it will take time before we could conduct exports," he said at a press conference regarding the establishment of a sustainable palm oil development program and a palm oil plantation fund management agency.

The minister said imports of capital goods would increase because the government is spurring infrastructure development.

"The more infrastructure we build the more capital goods we have to import. As soon as investment is realized imports of capital goods will increase," he said.

Meanwhile he said exports could also slowdown if the world's demand declined.

He said fast development efforts would need more capital goods and so import activity would rise.

"In May according to our data our imports and exports were down and it was in line with the contraction that we saw in the international trade seen in various countries due to a drop in Chinese growth and lower growth in Europe causing international trade contraction and also affecting our imports and exports," he said.

He said exports had dropped because the price of commodities slumped.

With the low price of commodities such as rubber and palm oil income of the people who rely on the commodities also drops. "Now the purchasing power of the community is low because of the drop in the prices of commodities," he said.

The minister said the government could not do anything with  external factors but would strive to improve the internal factors by accelerating financing of government programs using funds collected from the community.

"It is the internal factor that we must improve. The internal factor is how we expedite spending. That is what must be increased because the government's spending is one of the factors that could increase public buying power," he said.

Based on the National Statistics Agency Indonesia's trade balance in May 2015 was in surplus of US$0.95 billion driven by surplus in non-oil/gas sector of US$1.66 billion despite a deficit in the oil/gas sector of US$0.71 billion.

Indonesia's exports in May 2015 reached US$12.56 billion down 4.11 percent from April or 15.24 percent from the same period in 2014.

The country's imports in May 2015 meanwhile reached US$11.61 billion down 8.05 percent from April or 21.40 percent from the same period last year. (WDY)