Japanese Statistics: Machinery Orders, Tankan and Current Account

Indonesia is one of the brighter spots among the emerging economies of the far East. The year to year increase in GDP was 6.39% in the second quarter, up from 6.31% in the first quarter and second only to growth in China.  The first chart shows the growth of a few of far eastern countries that have reported second quarter GDP.  Growth accelerated in Indonesia in the second quarter while it decelerated in China and South Korea.  Growth in Singapore, like that in Indonesia, accelerated in the second quarter, but at a much lower level.

The slight acceleration in growth in the economy of Indonesia occurred in spite of a year to year decline of 28.8%  in net exports of goods and services, the result of an 11.1% rise in imports  of goods and service and a 1.5% decline in exports of goods and services.  The decline in the exports of goods and services was due largely to the decline in the export of goods rather than of services and the rise in imports was also due to the import of good rather than services.  The increase in imports could be associated, in part, with the increase in fixed investment. The second chart shows the trade in goods:  exports, imports and balance. The second quarter saw Indonesia's first negative balance of trade.

Fixed investment and inventory accumulation helped offset the decline in  net exports of goods and services.  Fixed investment rose 12.2% on a year to year basis and inventories added 13.trillion Rupiahs to the economy.  Fixed investment has been an important factor in the growth of the Indonesian economy, as can be seen in the third chart .  It currently  accounts for 26% of GDP.

While the year to year growth in the Indonesian economy is encouraging, a word or two of caution is appropriate. The decline in exports in the face of a declining rupiah is a cause for concern.  In addition, an increase in inventories is not necessarily a positive development and an increase in the statistical discrepancy has no economic significance.

Q 2 '12 Q1 '12 Q2 '11 M/M % Chg Y/Y % Chg 2011 % Chg 2010% Chg 2009 %Chg GDP (Trillions of Rupiahs) 649.7 639.2 610.7 1.65 6.39 6.46 6.20 4.63 50.3 71.2 70.7 -29.3 -28.8 14.5 8.5 11.7 166.3 157.8 148.2 5.39 12.21 8.81 8.50 3.29 Inventory Change 24.2 16.9 10.3 7.3 13.8 10.8 13.0 -4.5 Statistical Discrepancy -2.1 -11.0 8.7 8.9 6.6 -8.0 5.4 4.1 Trade in Goods (Billion of US$) Exports 48.2 51.2 52.9 -3.1 -4.7 45.3 41.7 -21.1 Imports 49.8 49.5 44.0 0.3 4.8 41.7 39.1 -32.4 Balance -1.6 1.7 8.1 -3.3 -10.6 3.6 2.5 11.3