Jay Solomon, Jakarta – Indonesia recorded another healthy trade surplus in November, though analysts expressed some concern about future trends in the country's exports.

Data released Wednesday also showed inflation firmly in check, with a surprisingly modest 5.5% rise reported for January's consumer price index (CPI).

But analysts cautioned against any substantial extra cut in interest rates by Bank Indonesia, the nation's central bank. Though the trade picture looks more stable, Indonesia still needs to keep a close eye on the level of its current account deficit, they said.

'November trade figures aren't overly bullish for Indonesia's economy,' said Don Hanna of Goldman Sachs in Hong Kong. 'And it shows the economy is certainly not out of the woods yet.'

As reported, Indonesia's trade surplus amounted to $764.6 million in November, up from $708.8 million in November 1995, an official at the Ministry of Industry and Trade said Wednesday.

That brings the surplus for the first 11 months of 1996 to $6.14 billion, nearly double the $3.67 billion during the same period a year earlier, noted Manmindar Singh, a Singapore-based economist at the Nomura Research Institute.

The trade ministry official said Indonesia's exports, including oil and gas, rose in November to $4.409 billion, up 8.1% from the previous November's $4.080 billion. Its imports, including oil and gas, rose to $3.645 billion from the previous year's $3.371 billion.

Singh and others said that the trade surplus benefited dramatically from the weakening of the Japanese yen against the U.S. dollar, higher oil prices, and Bank Indonesia's succes in slowing import growth.

But economists also noted the declining growth in Indonesia's non-oil exports, a factor which pushed the November surplus down from October's surplus of $995.7 million.

Non-oil exports in November were up 4.3% at $3.346 billion from $3.207 billion in November 1995. Non-oil imports rose to $3.173 billion in November 1996, up 2.3% from $3.101 billion in November 1995.

Dominique Maire, an economist at UBS Securities in Singapore, said the November data underlines the recent declining trend in non-oil export growth.

In 1995 Indonesian non-oil exports grew by 15%, but the rate dropped to 13% in the first half of 1996. Since then, it has continued to slow, with November's rate down sharply from annual growth of 8.3% in September.

Maire said the trend has been driven by the poor performance of Indonesia's 'traditional' non-oil exports: plywood and textiles.

Plywood exports fell 3% over the first half of 1996, Maire said, while textile export growth slowed to 6%. On the positive side, however, manufactured goods - like electronics, shoes, and circuit boards - grew by 10%.

Meanwhile, import growth - which Bank Indonesia has successfully slowed this year - is expected to pick up again in 1997.

For 1995, total imports grew by 28% from a year earlier, but through November 1996 the growth rate slowed to only 5%. Economists said that that a number of indicators suggest that imports are bound to pick up.

In October, for example, credit growth was at 24%, significantly higher than the government's target of 17%. Meanwhile, foreign direct investment (FDI) over the first nine months of 1996 was still relatively high at $4.5 billion.

'Import (growth) dropped so much in 1996 in some ways because ot a high base effect and weaker demand for consumer goods,' said Maire. 'It is only natural in 1997 - with easing interest rates - that these imports will start to trend higher.'

Economists also said that Indonesia's trade balance remains vulnerable to any strengthening of the Japanese yen and a weakening in oil prices.

As a result, economists caution against any major rate cuts by Bank Indonesia in the year ahead.

Bank Indonesia already cut a key deposit rate by 50 basis points in December, and many think cuts of as much as 200 basis points are possible in 1997. The economists warned, however, about cutting by more than 100 basis points. 'Interest rates have already come off, though it is unclear if the economy is really that stable or the current-account (deficit) is still a threat,' said Hanna. 'We think it is - though its not as bad as Thailand - and caution against easing.'

Indonesia's government projected in January a current-account deficit of $9.8 billion for the year to March 31, 1998, equivalent to 4% of GDP. Most economists say this is a respectable estimate and significantly lower than Thailand's current-account deficit, which is running around 8% of GDP.

Meanwhile, Indonesia's CPI, the main inflation measure, was at 191.58 in January, up 1.03% from December and up 5.5% from January last year, the government announced Wednesday.

The 1.03% figure was below market expectations, as economists had expected the fasting month of Ramadan to boost prices.

'We were expecting something more like 1.3% so the results were quite good,' said Singh. 'This is one of the lowest Januarys in a long time.'