Indonesia's exports rose 1.2 per cent to $US57 billion ($97.3 billion) in 2002 from a year earlier, helped by higher oil and commodity prices as well as a boost in overseas orders for machinery and other manufactured goods.
Imports rose 0.9 per cent to $US31.24 billion from 2001, yielding a trade surplus of $US25.76 billion, the Bureau of Statistics said. The country's trade surplus last year was 1.6 per cent higher than 2001's $US25.35 billion.
As overseas investments slow, the Government is counting on a recovery in exports and consumer spending to help limit the impact on the economy of last year's terrorist attack on Bali. Jakarta cut its growth forecast for the economy, the Asia-Pacific's sixth largest, after the October 12 attack – from 5 per cent to 4 per cent.
Still, signs of sluggish global growth, particularly in the US and Japan, and worries over the fallout from a US-led war against Iraq, will curb investment and growth prospects in the archipelago.
The US, Indonesia's largest export market, expanded at a slower-than-expected 0.7 per cent pace in the fourth quarter.
"The story on the export front related to the US and Europe is not going be that favourable," said Craig Chan, head of Asian research at Forecast in Singapore. "There are still huge risk events that could damp demand from the US – Indonesian non-oil exports could get hit from a war."
December exports rose 13.9 per cent from a year ago to $US4.8 billion on higher oil prices. That was double the 6.9 per cent gain estimated by economists. In Jakarta yesterday the rupiah fell 0.05 per cent to 8876 to the US dollar, while the Composite index was 1.77 points higher at 390.21 in late trading.
Still, economists are sceptical the pace of export recovery can last if Indonesia does not win more foreign investment. Overseas investments into Indonesia have slowed, falling 35 per cent last year to $US9.7 billion, the lowest in nine years. Indonesia needs to attract capital to help fund a 34.4 trillion rupiah ($6.65 billion) budget deficit this year.
"Given there hasn't been much new private investment spending in Indonesia, that is constraining non-oil exports," said Paul Schymyck, an economist at IDEAglobal in Singapore.
The Bali attack also caused foreign governments, including Australia, the US and UK, to issue warnings to its citizens to defer travel to Indonesia. Besides hurting tourism, the move also hurt exporters as buyers stayed away and booked purchases from alternate markets, including Thailand and Vietnam.
Non-oil exports, a measure of industrial activity, rose 2.8 per cent to $US44.89 billion in 2002 from the previous year. For December, non-oil exports of goods such as textiles, palm oil and handicrafts rose 8.3 per cent from a year ago to $US3.62 billion, while non-oil imports rose 38.5 per cent to $US2.36 billion.
Manufacturing accounts for a quarter of the economy. The rise in non-oil exports and imports may signal renewed demand for Indonesian-made goods and orders for more raw material and machinery in anticipation of future orders.
Indonesia had forecast non-oil exports to grow about 2.5 per cent in 2002 after falling 9.3 per cent in 2001 to $US56.32 billion. Exports of palm oil may increase 9 per cent this year.