JAKARTA (Reuters) -Indonesia's trade surplus narrowed in November to $2.41 billion as imports increased more than expected, while exports extended their weakening trend, data from the statistics bureau showed on Friday.
Southeast Asia's biggest economy has seen its shipments declining by value in the past months due to falling commodity prices and slowing global demand.
In November, exports fell 8.56% on a yearly basis to $22 billion versus expectations of 9.36% drop in a Reuters poll.
Shipment of Indonesia's coal and palm oil, which are its top commodities, were down 34.25% and 12.60% on an annual basis, respectively, as prices continued to weaken in November.
Total volume of coal and crude palm oil exports in November were at 33.9 million metric tons and 2.5 million metric tons, respectively.
Imports, on the other hand, were up 3.29% on a yearly basis to $19.59 billion, much higher than the prediction in the poll for only a 0.20% increase.
The imports were boosted by rising purchases of consumer and capital goods, up 19.82% and 13.66%, respectively. Meanwhile, imports of raw materials were down 1.05%.
"Higher imports in consumer goods was driven among others by imports of food commodities," Pudji Ismartini, deputy head of Statistics Indonesia, said at Friday's press conference.
Indonesia imported 433,000 metric tons of rice in November, up from 312,000 tons in October, followed also by higher imports of sugar and corn in the same month, the bureau's data shows.
The government has been trying to keep headline inflation low by ensuring sufficient food supply partly supported by imports.
Last month, Indonesia's annual inflation rate accelerated more than expected to 2.86% due to rising food prices, including rice. However, the inflation rate is still within Bank Indonesia's (BI) target range for 2023 at 2% to 4%.
Irman Faiz, Bank Danamon's economist, said the November trade balance is still inline with his expectation of a narrowing surplus in the future, and maintained his forecast for a current account deficit at 0.4% of GDP this year.
"The current account deficit continues to stay below the historical average, providing a buffer for rupiah from portfolio flows pressure. As a result, we expect BI to keep the policy rate at 6.0% until the Fed decides to pivot," he said.
BI's next policy review is on Dec. 21, where expectations are for rates to be kept steady again following last month's on-hold decision.