JAKARTA, Feb 12 (Reuters) – Ibris Nickel Pte Ltd has not made a shipment from its remote mine in Indonesia’s Southeast Sulawesi for six weeks and is bleeding $12 million a month, one of hundreds of small miners squeezed by a controversial mineral export ban imposed last month.
The problems at privately owned Ibris illustrate one of several headwinds facing Indonesia, Southeast Asia’s biggest economy, despite a spate of surprisingly strong economic data.
Indonesia is not only confronting a mining crisis, but also the delayed effects of the central bank’s aggressive monetary tightening, political uncertainty in an election year, a slowdown in China, and the tapering of U.S. monetary stimulus.
“We very much doubt the economy has bottomed and expect the downturn to resume form in the current quarter,” said Robert Prior-Wandesforde, an economist at Credit Suisse. Recent data has looked good: December’s trade surplus, at $1.52 billion was double the market consensus, the largest in two years and the third straight monthly surplus, the government said last week.
Also last week, the government reported a better-than-expected 5.72 percent rise in fourth-quarter gross domestic product, from 5.62 percent in the previous three months. That broke five straight quarters of weakening growth.
This Friday should bring more positive news with an expected big improvement in Indonesia’s current account.
The widest measure of the flow of goods, services and money in and out of Indonesia has remained in deficit for eight quarters, driven by price declines for its most lucrative commodity exports – from coal to tin and palm oil.
The shortfall reached an unexpectedly large $9.8 billion in the quarter ended June 30, the biggest since before the 1997/98 Asian financial crisis and equivalent to 4.4 percent of GDP.
But commodity exports surged late last year and some economists expect Friday’s data to show the current-account deficit was at about 1.8 percent of GDP in the fourth quarter, down from 3.8 percent the previous quarter.
But they caution that in three weeks, the statistics bureau will release its January trade data, the first to reflect the impact of the shutdown of one of the world’s biggest mining sectors due to the mineral export ban that began on Jan. 12.
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