Exports and Imports Accelerate in November
Exports surged 21.3% YoY in November, mainly on a pick-up in non-oil and gas exports. Moving forward, we envisage exports of goods and services to return to growth of 6.8% in 2017, from an estimate of -4.0% in 2016 on:
1. A more stable to modest pick-up in primary commodity prices; and
2. A gradual improvement in world merchandise trade volume.
¨ We expect the current account deficit to improve in 4Q16. In November, the trade surplus narrowed to USD0.8bn, from +USD1.2bn in October. Albeit lower, this points to a higher trade surplus in 4Q 2016, suggesting that the country’s current account deficit in the balance of payments could improve during the quarter.
¨ Exports accelerated in November. This was mainly on account of a pick-up in non-oil and gas exports, particularly the hard commodities due to rising prices,and a smaller decline in oil product exports.
¨ A pick-up in exports was broad-based. This was mainly on the back of a rebound in exports to the EU, India, Australia and Taiwan, along with a pick-up in exports to Japan, South Korea, China, ASEAN and US.
¨ Imports registered a faster growth during the month. Imports picked up pace, growing 9.9% YoY, pointing to recovery in domestic economic activities. (Rizki Fajar)