Indonesia's June trade report released on Wednesday, shows country's monthly exportsin June rose by 5.91 percent to US$13.44 billion mom.
Indonesia's June trade report indicated some signs of stabilisation, consistent with China's better-than-expected June data. Indeed, the contractions of exports and imports eased markedly, with growth falling by 12.8% (5.9% m/m; May: -14.4% y/y) and 17.4% (11.6% m/m; May: -21.4% y/y), respectively. The release brought the YTD trade surplus to USD4.4bn, the highest since 2011. Barclays expects manufacturing shipments to improve in the coming months.
"With inflation trending above BI's target range in Q2-Q3, and given growing concerns about the IDR's vulnerability, we believe there is a strong case for BI to remain on hold this year. The focus will turn to speeding up infrastructure spending, which should drive growth in H2. We believe the growth dividend from infrastructure spending will make a significant contribution from 2016 onwards and should keep growth in 2015 marginally at 51%", says Barclays.
Trade Minister Rachmat Gobel said the government would try to increase exports to non-traditional markets such as African countries to achieve the 28 percent growth target, notes Barclays. He also hoped Iran would also be able to improve its trade relations with Indonesia after the trade sanctions imposed on the country were lifted in the coming months.
