Indonesian exports surge, inflation eases

JAKARTA—Indonesian exports surged 29 percent last year, and January inflation eased, date showed Wednesday, as Southeast Asia’s largest economy targeted emerging countries amid weakness in US and European markets.

Indonesia, the world’s most populous Muslim nation, has been basking in a welter of positive economic indicators in recent weeks, with the latest official figures showing shipments reached $203.62 billion last year.

The export data was a 29 percent hike over 2010 and beat the government’s target of $200 billion, according to data from the Central Statistics Agency.

Shipments in December dipped, losing 0.22 percent to $17.2 billion from a month earlier, but still gained 2.2 percent over December 2010.

Trade minister Gita Wirjawan last month set an export target of $230 billion in 2012, targeting emerging markets in Africa, the Middle East and Latin America to compensate for the slowdown in the United States and Europe.

Meanwhile, inflation eased again in January, the agency said, with the consumer price index rising 3.65 percent year on year, slower than the 3.79 percent rise in December.

The index rose 0.76 percent on month, compared with a 0.57 percent increase in December, as bad weather drove up food prices and stoked inflation.

Core inflation, which excludes volatile food and energy prices, slowed to 4.29 percent year on year in January, compared with 4.34 percent in December.

In November, Bank Indonesia made a major slash to its overnight benchmark rate from 6.5 percent to 6 percent, the second cut in two months after prices dropped 0.12 percent in October from September.

It has remained unchanged since then, but analysts say there could be a cut this month.

“If the central bank remains optimistic that inflation will remain low and under control, I don’t see why they would not cut the interest rate in February,” said Destry Damayanti, chief economist at Bank Mandiri.

Last month, Moody’s ratings agency upgraded Jakarta to Baa3 from Ba1 with a stable outlook – after a similar move by Fitch – with officials saying the stronger credit ratings would attract more foreign investment.

Indonesia’s foreign direct investment in 2011 hit a record $20 billion, with Singapore, Japan and the United States among top investors.

The trade minister said the economy may grow to $9.3 trillion by 2030, a more than tenfold increase from the country’s current output.

Indonesia’s major exports include oil, natural gas, palm oil, coal, electrical appliances, textiles and rubber. Other natural resources include copper, tin, gold and timber.