Contact Address: Balance of Payments Bureau Directorate of Economic and Monetary Statistics Bank Indonesia Sjafruddin Prawiranegara Tower, 17 th

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2 Contact Address: Balance of Payments Bureau Directorate of Economic and Monetary Statistics Bank Indonesia Sjafruddin Prawiranegara Tower, 17 th Floor Jl. M. H. Thamrin No. 2 Jakarta 135 Phone : (21) Fax : (21) BNP@bi.go.id Website : 2

3 February 211 INDONESIA S BALANCE OF PAYMENTS REPORT Fourth Quarter 211 3

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5 LIST OF CONTENTS SUMMARY 1 INDONESIA S BALANCE OF PAYMENTS IN Q4/211 AND OVERALL 211 WITH ITS CONTRIBUTING FACTORS 3 CURRENT ACCOUNT 5 1. Goods Trade Balance Exports of Goods Imports of Goods Services Trade Balance Income Account Current Transfers 18 CAPITAL AND FINANCIAL ACCOUNT Direct Investment Portfolio Investment Other Investment 25 RESERVE ASSETS 29 INDICATORS OF EXTERNAL SUSTAINABILITY 31 5

6 LIST OF TABLES Page Page Table 1 Developments in Indonesia's Balance of Payments and Some Economic Indicators 4 Table 14 Imports (c.i.f) by Classification of Goods 13 Table 2 Trade Balance in Goods Based on BPM5 6 Table 15 Non-oil and Gas Imports (c.i.f) by Main Country of Origin Table 3 Goods Export Growth by Sector 7 Table 16 Imports of 1 Leading Non-oil and Gas Commodities (c.i.f) by Economic Category Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 1 Table 11 Goods Exports by Major Destination Countries Developments in Exports of Major Non-oil and Gas Commodities Coal Exports by Major Destination Countries Palm Oil Exports by Major Destination Countries Exports of Rubber Products by Major Destination Countries Exports of Textiles and Textile Products by Major Destination Countries Exports of Metal Products by Major Destination Countries Exports of Electrical Appliances by Major Destination Countries 7 Table 17 Imports of Industrial Supplies (Processed) (c.i.f) by Main Country of Origin 7 Table 18 Imports of Capital Goods (except Transport Equipment) (c.i.f) by Main Country of Origin 8 Table 19 Imports of Parts & Accessories for Capital Goods (c.i.f) by Main Country of Origin 9 Table 2 Imports of Parts & Accessories for Transport Equipment (c.i.f) by Main Country of Origin 1 Table 21 Imports of Industrial Supplies (Primary) (c.i.f) by Main Country of Origin 1 Table 22 Oil Imports Table 23 World Demand and Supply for Oil Table 24 Developments in Indonesia's Sovereign Rating Table 12 Oil Exports 11 Table 25 Indicators of External Sustainability 31 Table 13 Gas Exports

7 LIST OF CHARTS Page Page Chart 1 Current Account 5 Chart 17 FDI by Economic Sector 22 Chart 2 Non-Oil and Gas Trade Balance 6 Chart 18 FDI by Country of Origin 22 Chart 3 Oil and Gas Trade Balance 6 Chart 19 Developments in Portfolio Investment 23 Chart 4 Coal Prices and Export Growth 8 Chart 2 Changes in Foreigner Holdings of SBIs and Indonesian Government Securities 23 Chart 5 Palm Oil Prices and Export Growth 9 Chart 21 Yield on Indonesia Global Bonds and US T- 24 Notes Chart 6 Rubber Prices and Export Growth 9 Chart 22 Developments in UIP and CIP 24 Chart 7 Developments in World Oil Prices 12 Chart 23 Foreigner Transactions on the IDX and JCI 25 Chart 8 Consumption of Oil-Based Fuels 17 Chart 24 Developments in ASEAN Stock Market 25 Indices Chart 9 Developments in the Services Trade Balance 17 Chart 25 Portfolio Investment by Institutional Sector 25 Chart 1 Developments in Travel Services 18 Chart 26 Developments in Other Investment 26 Chart 11 Developments in the Income Account 18 Chart 27 Other Investment Asset Transactions, 26 Private Sector Chart 12 Workers Remittances 18 Chart 28 Other Investment Liability Transactions 26 Chart 13 Composition of Migrant Workers, Asia-Pacific Region 19 Chart 29 Developments in Public Sector Foreign Loans 27 Chart 14 Chart 15 Composition of Migrant Workers, Middle East and Africa Developments in the Capital and Financial Account Chart 16 Developments in Direct Investment Chart 3 Developments in Private Sector Foreign Loans 21 Chart 31 Reserve Assets

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9 SUMMARY SUMMARY Indonesia's balance of payments for 211 registered a surplus of US$11.9 billion. Contributing to this performance were surpluses in the current account and the capital and financial account at US$2.1 billion and US$14. billion respectively. The current account surplus was sustained by respectable export growth despite slackening world demand. Similarly, the capital and financial account surplus was bolstered by higher inflows of foreign direct investment (FDI) and drawing on private external debt in keeping with the conducive investment climate and stable macroeconomic condition. Consequently, international reserves widened from US$96.2 billion at the end of 21 to US$11.1 billion at the end of 211, which was equivalent to 6.4 months of imports and servicing of official external debt. In quarterly basis, the balance of payments maintained positive performance during the first and second quarters of the year, driven in part by strong increases in export commodity prices and buoyant inflows of foreign portfolio investment. However, in the third quarter, the balance of payments suffered a deficit due to the spill-over effects of the financial crisis in Europe that triggered outflows of foreign portfolio investment. Pressures on the balance of payments subsequently eased in the fourth quarter following resumption in foreign portfolio investment inflows and significant increases in foreign direct investment, as well as higher drawing on private external debt. Despite the improvement, the fourth quarter balance of payments charted a deficit in its current account. This modest deficit (about.4% of GDP) was explained by steady expansion in imports in line with vibrant domestic demand, while exports declined as a result of flagging world demand and weakening commodity prices. 1

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11 INDONESIA S BALANCE OF PAYMENTS IN Q4/211 AND OVERALL 211 WITH ITS CONTRIBUTING FACTORS Amid uncertainty over resolution of the debt crisis in Europe and the economic slowdown in the United States with their spillover effects on some of Indonesia's major emerging market trading partners, Indonesia's balance of payments maintained quite robust performance in 211 with a USD11.9 billion surplus, even though down from the 21 surplus of USD3.3 billion. Indonesia's balance of payments performance was strengthened mainly by high commodity prices and immense inflows of portfolio capital during the first half of 211. However, mounting negative sentiment fuelled by global economic uncertainties during Q3/211 led to downward pressure on the financial account from heavy outflows of capital from portfolio investments. As developments progressed, negative pressure on the balance of payments began to ease in the subsequent quarter. The balance of payments deficit in Q4/211 narrowed to USD3.7 billion from the previous quarter's deficit of USD4. billion. Key to this improvement was the reduced deficit pressure in the capital and financial account during Q4/211, with the deficit falling from USD4.1 billion in Q3/211 to USD1.4 billion. Outflows from the capital and financial account eased following a resumption of foreign portfolio investment and significant increases in foreign direct investment and drawing on private sector external debt. On the other side, the goods trade surplus came down as a result of steady expansion in imports in keeping with vibrant domestic demand, in contrast to the decline in exports from flagging world demand and weakening commodity prices. As a result of the reduced goods trade surplus and a subsequent widening deficit in services, the current account ran a Q4/211 deficit of USD.9 billion (about.4% of GDP). Factors influencing the Indonesia balance of payments during Q4/211 include: Economy in Q4/211 grew robustly at 6.5%, supported by expansion in household consumption and investment at 4.9% and 11.5%, repectively. This vibrant domestic demand fuelled brisk growth in non-oil and gas imports at 2.4% (y.o.y); The steeper fall in commodity prices and downturn in the world economy has slowed non-oil and gas exports (1.%; y.o.y); Mounting demand for gas (most importantly LNG) for domestic consumption amid natural declining in gas output at ageing refineries (i.e. Bontang and Arun) that failed to be closed with increased gas exploration activity at newest refinary (Tangguh) has decreased gas exports; The strong domestic economic fundamentals and buoyant economic outlook has sustained a high level of direct investment, which dominates the financial account structure in the balance of payments; Indonesia's financial market stability and attractive yields have fuelled a resurgence of portfolio investment inflows that has easing pressure in the financial account deficit, despite the ongoing uncertainty over resolution of the debt crisis in Europe and the economic slowdown in the United States. 3

12 Table 1 Developments in Indonesia's Balance of Payments and Some Economic Indicators ITEMS WORLD ECONOMIC INDICATORS UNITS 29 21* 211 Total Q1 Q2 Q3 Q4 Total Q1* Q2* Q3* Q4** Total Economic Growth United States of America % (y.o.y) 3,5 2,2 3,3 3,5 3,1 3, 2,2 1,6 1,5 1,6 1,7 Japan % (y.o.y) 6,3 5,7 3,1 5, 2,2 4,,3 1,7,5 1,,9 European Union % (y.o.y) 4,1,8 2, 2, 2, 1,8 2,5 1,8 1,4,7 1,5 f Singapore % (y.o.y) 1, 16,5 19,8 1,6 12,5 14,8 9,1 1,2 6, 3,6 4,9 f China % (y.o.y) 9,1 11,9 1,3 9,6 9,8 1,3 9,7 9,5 9,1 8,9 9,2 World Price Commodity ¹) Crude Oil (OPEC) USD/barel 61,1 75,5 76,6 73,8 83,9 77,5 11,3 112,2 18,4 17,8 17,5 Coal USD/metric ton , , 12 12, ,9 Copper USD/metric ton CPO USD/ton , ,4 Rubber cent USD/kg , , International Interest Rates ¹) United States of America %,3,25,25,25,25,25,25,25,3,25,3 Japan %,11,9,9,1,9,9,9,5,1,5,1 European Union % 1,23 1, 1, 1, 1, 1, 1, 1,25 1,5 1,25 1,3 Singapore %,66,26,48,36,3,35,3,26,4,37,3 China % 1,8 1,8 1,8 1,8 1,95 1,84 2,25 2,25 2,3 2,25 2,3 Inflation ²) United States of America % (y.o.y) 2,8 2,4 1,1 1,1 1,4 1,4 2,7 3,4 3,9 3,9 3,1 Japan % (y.o.y) 1,7 1,1,7,6,,,5,4,,2,2 European Union % (y.o.y),9 1,6 1,5 1,8 2,2 2,2 2,6 2,7 3, 3, 2,7 Singapore % (y.o.y),5 1,6 2,7 3,7 4,6 4,6 5, 5,2 5,5 5,5 5,5 China % (y.o.y) 1,9 2,4 2,9 3,6 4,6 4,6 5,4 6,4 6,1 4,1 4,1 DOMESTIC ECONOMIC INDICATORS GDP % (y.o.y) 4,5 5,6 6,1 5,8 6,9 6,1 6,5 6,5 6,5 6,5 6,5 CPI Inflation ²) % (y.o.y) 2,8 3,4 5,1 5,8 7, 7, 6,7 5,4 4,9 3,8 3,8 Exchange Rates ¹) (Rp/USD) Average Price of Crude Oil Export USD/barel 59,6 75,2 76,8 73,8 84,9 77,7 12,3 114,9 111,1 18,6 19,2 Oil Production mbpd,949,954,965,95,912,945,98,9,97,893,92 Fuel Consumption mbpy 39,7 94,3 1,3 15,6 14,8 44,9 18,6 113,3 114,2 114,4 45,5 Gas Export (LNG) mmbtu , , , ,2 Gas Export Average Price (LNG) USD/mmbtu 7, 7,8 7,8 7,5 8,1 7,8 1,3 12,1 12,9 11,9 11,8 BI Rate 1) % (annual) 7,15 6,5 6,5 6,5 6,5 6,5 6,8 6,75 6,75 6, 6, INDONESIA'S BALANCE OF PAYMENTS Current Account million USD Capital and Financial Account million USD Total million USD Net Errors and Omissions million USD Overall Balance million USD Foreign Exchange Reserves million USD Source: Bank Indonesia, CEIC, IMF, World Bank, and other sources ¹) an interest rate policy sets by central bank / monetary authority (calculated as the monthly average ) ²) end month position of the relevant quarter *) Provisional figures (for Indonesia's Balance of Payments) ** Very provisional figures (for Indonesia's Balance of Payments) f (Consesus forecast estimation) 4

13 CURRENT ACCOUNT The current account charted positive performance during 211, booking a surplus of USD2.1 billion. However, the current account surplus was down from the preceding year due to the high growth in imports compared to exports. The high level of imports was spurred by robust domestic demand, while exports slowed in response to weakening external demand and the downward trend in commodity prices, particularly during Q4/211. Added to this, enlarged deficits in the services and income accounts also contributed to a reduced current account surplus in 211. In quarterly terms, non-oil and gas exports in Q4/211 were down from the preceding quarter, due to the world economic downturn and accelerated decline in commodity prices. Pressure mounted on goods exports from the contraction in gas exports caused by falling national gas, particularly LNG production at a time of rising demand for gas to satisfy domestic needs. On the other hand, goods imports have maintained steady expansion on strong domestic demand, a development that has also widened the services deficit. As a result, the current account posted a Q4/211 deficit of USD.9 billion (-.4% of GDP), in comparison to the USD.5 billion surplus in the preceding quarter. million USD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4** 29 21* 211 Trade Balance Services Income Current Trans. Current Account * provisional figures ** Vey provisional figures Chart 1 Current Account 1. Goods Trade Balance During Q4/211, the goods trade surplus fell to USD7.4 billion from the previous USD9.6 billion. The non-oil and gas trade surplus narrowed primarily from decline in exports while imports mounted further in comparison to Q3/211. In oil and gas trade, however, both exports and imports were decline. During the quarter, non-oil and gas exports contracted by 1.3% (q.t.q), in contrast to growth in non-oil and gas imports at 4.6% (q.t.q). This condition was consistent with persistently strong domestic demand in contrast to softening external demand and weakening commodity prices. In comparison to the same period one year earlier, non-oil gas exports grew by only 1.% (y.o.y), well below the brisk growth in non-oil and gas imports at 2.4% (y.o.y). 5

14 million USD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4** 29 21* 211 Chart 2 Non-oil and Gas Trade Balance In other developments, the gas trade surplus fell from USD4.6 billion to USD4.1 billion, primarily due to reduced volume of LNG exports in response to lower production and rising demand to satisfy domestic consumption. At the same time, the oil trade deficit eased from USD4.1 billion to USD3.7 billion, helping to prevent further decline in the goods trade balance. Taken together, the oil and gas trade surplus reached USD428 million during the quarter, down from USD51 million surplus one quarter earlier. Chart 3 Oil and Gas Trade Balance million USD Exports Imports Non Oil & Gas Trade Balance (RHS) * Provisional figures ** Very provisional figures million USD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4** 29 21* Performance in the goods trade balance can also be analysed by aggregation into the following five goods categories: (1) general merchandise, (2) goods for million USD 2.4 Exports Imports Oil & Gas Trade Balance (RHS) * Provisional figures ** Very provisional figures processing, (3) repair on goods, (4) goods procured in ports by carriers and (5) non-monetary gold. General merchandise accounted for the leading contribution to the goods trade surplus with USD6.4 billion during the quarter under review, although down from the USD8.9 billion recorded in the previous period. Meanwhile, repair on goods recorded a deficit during the quarter at USD41 million. Table 2 Trade Balance in Goods Based on BPM5 Details 1.1. Exports of Goods Trade Balance (million USD) 21* 211 Total Q1* Q2* Q3* Q4** Total General Merchandise Goods for processing Repairs on goods Goods procured in ports by carriers Nonmonetary gold Goods Trade Balance * Provisional figures ** Very provisional figures During Q4/211, goods exports reached USD51.4 billion, down 2.1% from USD52.5 billion one quarter earlier. The fall in exports was explained by negative growth in the manufacturing and mining sectors at - 2.% (q.t.q) and -3.% (q.t.q), while agriculture recorded positive growth at 14.5% (q.t.q). Manufacturing accounted for the leading contribution to goods exports at 63.2%, followed by the mining sector at 33.1%. Measured against same period one year before, exports of goods registered 12.1% growth, well below growth in the preceding quarter at 32.1% (y.o.y). Annual growth in exports was bolstered mainly by the growth of mining sector (26.2%, y.o.y) and manufacturing (5.9%, y.o.y). 6

15 Details Table 3 Goods Export Growth by Sector Q3* Q4** Q3* Q4** Agricultural Products 3,2 2,6-6,6 14,5-12,7-1,3 Manufacture Products 64,4 63,2-3,2-2, 28,3 5,9 (including oil & gas) Mining Products (including oil & gas) 31,5 33,1 11,1-3, 43,5 26,2 Other goods (including oil & gas) 1, 1,2 6,8-11,5 75,6 29,1 Total Exports 1, 1, 1,3-2,1 32,1 12,1 o.w. Oil 9,9 1,1 3,8 1, 38,4 15,2 Gas 8,2 8,9 14, -11,8 59,9 31,4 * Provisional figures ** Very provisional figures Share (%) 21* 211** Growth q.t.q (%) Growth y.o.y (%) Decline in goods exports during Q4/211 compared to the previous quarter was reflected in shrinking exports to major destinations, except China. Indonesia's goods exports to Singapore, Japan, the European Union and the United States charted negative quarterly growth at -19.1%, -9.6%, -6.3% and -.9%. On annual basis, Indonesia's exports to these leading destinations registered positive growth, with the exception of exports to the European Union (EU) that contracted in response to the economic weakening caused by the lingering debt crisis. Table 4 Goods Exports by Major Destination Countries Country Value (mill USD) q.t.q y.o.y 21* 211** Japan ,1-9,6 8,6 32,1 28, China ,5 18,6 38, 34,6 5,8 European Union ,3-6,3-2,6 23,7 2,9 USA ,2 -,9 7,2 31,8 17,6 Singapore ,2-19,1 3,3 26,2 16,8 Others ,7 -,9 12,5 35,1 27,8 Total , -2,1 12,1 32,1 27,5 *) Provisional figures **) Very provisional figures Q4-211** Share (%) Growth (%) Growth (y.o.y) Key commodities bolstering non-oil and gas exports during the quarter under review include coal, palm oil, rubber products, textiles and textile products, metal products and electrical appliances. Table 5 Developments in Exports of Major Non-Oil and Gas Commodities Share (%) Growth q.t.q (%) Growth y.o.y (%) Nominal Real Price Index Nominal Real Price Index 21* 211** Q3* Q4** Q3* Q4** Q3* Q4** Q3* Q4** Q3* Q4** Q3* Q4** 1. Coal 13,8 16,6 1,8 11,7 1,2 16,2 9,5-3,9 61,9 6,9 18,7 32,3 36,3 21,7 2. Palm Oil 1,4 1,7-19,9 17,6-15,6 24,4-5,1-5,4 17,8-2,1-11, -3,7 32,3 1,7 3. Rubber Product 7,1 8,7-7,7-15,1 -,1-7,4-7,7-8,3 58,4 13,7 38, 18,6 14,8-4,1 4. Textile & Textile Product 8,7 8,2-1,1-6,9 1,2-6,3-2,3 -,6 15,9 4,6 6,6,5 8,8 4,1 5. Metal Product 7,6 7,3-5,5-21,9-3,1-15,9-2,5-7,1 31,9-19,3 8,9-17,7 21,2-1,9 6. Electrical Appliances 8,5 7,1 1,4-6,2 14,9-9,8-3,9 4, 7,5-1,5-2,5-13,2 1,3 13,5 7. Coppers 4,9 2,9 39,8-65,1 41,6-65, -1,3 -,3-13,3-67,2-2,4-65,8 9, -4,3 9. Processed Food 2,8 2,9 4,5 19,7 6,1 2,8-1,5 -,9 34,8 36,8 24,3 28,7 8,4 6,3 8. Chemicals 2,6 2,9-7,2-14,7-5,9-14, -1,3 -,9 55,7 9, 36,3 3,3 14,3 5,5 1. Papers 3,2 2,5-3,7-8,3-13,1-5,8 1,8-2,7 8,3-13,7-8,2-23,1 18, 12,1 *) provisional figures **) very provisional figures 7

16 Coal Coal exports in Q4/211 grew by 11.7% (q.t.q) to USD8. billion, a record high since 29. With a 16.6% share of total non-oil and gas exports in 211, coal is Indonesia's most important non-oil and gas export commodity. The higher coal exports during Q4/211 were influenced more by increased export volume, which mounted 16.2% over the preceding period. Growth in demand was driven mainly by China (28.8%, q.t.q), Japan (14.1%, q.t.q), and Taiwan (33.3%, q.t.q). The robust demand for coal from China and Japan has been spurred by the growing need to fuel power plants in those countries. Growth in coal exports was dampened by a fall in exports to India, which recorded negative growth at 7.8% (q.t.q) due to slumping activity in the steel, cement and direct reduced iron (DRI) industries in that nation. Table 6 Coal Exports by Major Destination Countries Country Value (mill USD) q.t.q y.o.y 21* 211** China , 28,8 116,5 14,3 8,5 India ,9-7,8 93,7 16,9 14,2 Japan ,8 14,1 27,3 22,8 37, South Korea 799 1, 7,7 29,3 3,8 13, Taiwan 763 9,5 33,3 48,7-5, 42, Others ,8-5,6 25,8 14,4 31,9 Total 8.4 1, 11,7 6,9 29,3 51,9 *) Provisional figures **) Very provisional figures Q4-211** Share (%) Growth (%) Growth (y.o.y) International coal prices fell during Q4/211 to USD114.5/Mton from USD12.6/Mton in the previous quarter. The lower prices were the result of softening demand for coal in Asia and Europe in response to the weakening trend in the global economy. USD/MTon y.o.y (%) Chart 4 Coal Prices and Export Growth In a similar vein to the quarterly growth, annual growth in coal exports also charted high growth (6.9%; y.o.y), although lower than the growth in the previous quarter at 61.9% (y.o.y). Palm Oil Prices Export Growth (RHS) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Source : World Bank Exports of palm oil were recorded at USD5. billion during Q4/211, grew by 17.6% (q.t.q). The rise in exports resulted mainly from increased export volume at 24.4% (q.t.q), while prices came down 5.4% (q.t.q). The 16.5% hike in export taxes adopted by the government in October 211 does not appear yet to have dented palm oil exports. Leading growth destinations for palm oil exports were Malaysia (17.8%, q.t.q), China (87.5%, q.t.q), and the European Union (33.7%, q.t.q). However, exports to India and Singapore contracted by 7.9% (q.t.q) and 46.4% (q.t.q). Outside the five leading export destinations, palm oil exported to Pakistan soared by a remarkable 132.1% (q.t.q) following the signing of the Preferential Trade Agreement (PTA) between Indonesia and Pakistan that brings import duties on Indonesian palm oil be equal to those charged on Malaysia

17 Table 7 Palm Oil Exports by Major Destination Countries Country Value (mill USD) Q4-211** Growth Share Growth (%) (y.o.y) (%) q.t.q y.o.y 21* 211** India ,3-7,9-1,1 27,9 23, European Union ,5 33,7-2,2 18, -,1 China ,9 87,5-11,4 21,8 15,4 Malaysia 434 8,7 17,8-22,2 64,3 35,8 Singapore 122 2,5-46,4-53,3 65,4 24, Others ,1 14,6 36,6 35,2 65,7 Total , 17,6-2,1 3,9 29,9 *) Provisional figures **) Very provisional figures Prices for palm oil came down by 5.% (q.t.q) during the quarter, slipping from USD1,79/MTon in Q3/211 to USD1,25/MTon in Q4/211. This drop in world palm oil prices was explained by flagging global demand related to the ongoing crisis in the Eurozone and the weakening economy in the United States, even in spite of reduced supply from Southeast Asia brought about by seasonal factors and poor weather conditions. USD/MTon y.o.y (%) Source : World Bank Prices Export Growth (RHS) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Chart 5 Palm Oil Prices and Export Growth When compared with the same period one year earlier, growth in palm oil exports has steadily declined since Q2/211, slipping to a negative 2.1% (y.o.y) in Q4/211. This development was explained largely by diminished volume, which came down 3.7% (y.o.y). Lower volume was recorded for all major export destinations for palm oil. Rubber Products Exports of rubber products fell to USD3.1 billion in Q4/211 from the previous USD3.6 billion, representing a decline of 15.1% (q.t.q). This downturn was the result of reduced export volume and lower prices in line with falling rubber prices worldwide. During Q4/211, world rubber prices tumbled from USD465.3 cents/kg to USD36.6 cents/kg. This downward price trend has persisted since Q2/211 due to weakening demand from China, the world's largest rubber consuming nation. Falling world rubber prices were reflected in the lower unit price for Indonesia's rubber exports, which came down 8.3% (q.t.q) to USD42.4 cents/kg. The Indonesian Rubber Board plans to restrict export quotas in order to stabilise falling rubber prices, once the prices dropped below USD3 cents/kg. c/kg Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Source : World Bank Prices Export Growth (RHS) Chart 6 Rubber Prices and Export Growth y.o.y (%) Weak global demand for rubber was also reflected in the 7.4% (q.t.q) decline in volume of Indonesia's rubber product exports during Q4/211. Exports of rubber products to almost all major destinations were hit by decline, except for Japan where these exports grew by 13.5% (q.t.q). The surge in rubber exports to Japan was closely linked to the recovery process in Japan's automotive industry, following the downturn caused by the tsunami. 9

18 Despite the contraction in quarterly terms, Indonesia's rubber exports maintained an annual growth rate in Q4/211 at 13.7% (y.o.y). Table 8 Exports of Rubber Products by Major Destination Countries Country Value (mill USD) Textiles and Textile Products Q4-211** Growth Share Growth (%) (y.o.y) (%) q.t.q y.o.y 21* 211** USA ,6-4,7 15,9 125,8 57,9 European Union ,1-19,8 11,1 11,5 73,6 Japan , 13,5 53,7 87,5 69,4 China 45 13,3-33,5-8,6 71,5 42,1 South Korea 13 4,3-13,8 89,8 91,4 89,9 Others ,8-23,1,9 91,8 32,8 Total , -15,1 13,7 97,4 52,9 *) Provisional figures **) Very provisional figures Exports of textiles and textile products during Q4/211 were recorded at USD3.2 billion, down 6.9% (q.t.q) from the previous quarter. The drop in these exports resulted mainly from a 6.3% (q.t.q) fall in the volume of textile and textile product exports in response to sluggish markets in the United States and the European Union following the onset of economic crisis. Shrinking demand on these markets resulted in textiles and textile product exports to the United States slipping 13.8% (q.t.q) and exports to the European Union similarly down 9.8% (q.t.q). The United States and the EU are the primary drivers of Indonesia's exports of textiles and textile products, accounting for 32.9% and 18.% of these exports in 211. Besides the United States and the EU, textiles and textile product exports also fell for South Korea (-15.5%) and China (-18.6%). The decline in exports of textiles and textile products during Q4/211 was countered to some extent by a 2.6% (q.t.q) increase in exports to Japan. The positive growth in textiles and textile product exports to Japan despite the weakening global market was closely linked to the Indonesia Japan Economic Partnership Agreement (IJEPA) for Textiles and Apparel, launched by Indonesia and Japan in 29. Measured annually, exports of textiles and textile products maintained positive growth in Q4/211 at 4.6%. Table 9 Exports of Textiles and Textile Products by Major Destination Countries Country USA ,9-13,8 -,8 18,7 1,6 European Union 57 18, -9,8-1, 14,5 2, Japan 268 8,5 2,6 42,5 31,7 58,7 South Korea 17 3,4-15,5-16,9 38,1 16,7 China 94 3, -18,6-2,9 66,2 31,4 Others ,2 2,8 9,8 22,5 18,2 Total , -6,9 4,6 21,4 18,3 *) Provisional figures **) Very provisional figures Metal Products Value (mill USD) Q4-211** Growth Growth (%) Share (y.o.y) (%) q.t.q y.o.y 21* 211** Exports of metal products during Q4/211 were USD2.4 billion, a decline of 21.9% (q.t.q) from the previous quarter. The downturn in these exports was the result of a drop in prices (-15.9%, q.t.q) and export volume (-7.1%, q.t.q), most importantly for products made from iron, copper, nickel and tin. Copper exports have plunged due to the strike at PT Freeport Indonesia since last September that has halted Indonesian copper ore production. 1

19 Exports of metal products were down for all major destination countries, with the steepest losses recorded for exports to Thailand (-63.5%, q.t.q) due to falling exports of iron and copper. Table 1 Exports of Metal Products by Major Destination Countries Country Value (mill USD) Prices of metal products decline particularly for nickel, tin and copper, due to weak demand, while aluminium prices have tumbled in response to oversupply on world markets. In line with quarterly growth, exports of metal products measured in comparison to the same period one year before were similarly down 19.3% (y.o.y). Electrical Appliances Q4-211** Growth Share Growth (%) (y.o.y) (%) q.t.q y.o.y 21* 211** Japan 74 3,8-13,5-6,4 51,6 21, Singapore 42 16,7-28,2-3,4 13, 24,1 Malaysia 232 9,6-23,5-23,3 29,3 2,1 Thailand 13 4,3-63,5-51, 61,6 31,5 European Union 165 6,9-12,3-11,9 162, 62,4 Others ,8-14,5-16,3 32,7 15,2 Total , -21,9-19,3 37,7 2,2 *) Provisional figures **) Very provisional figures During the quarter, exports of electrical appliances contracted 6.2% from the previous period to USD2.9 billion. This decline was explained by a 9.8% fall in volume of exported electrical appliances from one quarter earlier. Lower exports were charted for the destinations of Singapore and the United States. On the other hand, exports to the European Union, Japan, and Hong Kong recorded positive growth. Country Table 11 Exports of Electrical Appliances by Major Destination Countries Measured annually, growth in exports of electrical appliances in Q4/211 was a negative 1.5% (y.o.y). Oil Exports Value (mill USD) Q4-211** Growth Share Growth (%) (y.o.y) (%) q.t.q y.o.y 21* 211** Singapore 6 2,7-14,3-11,1 48,6 6, European Union ,7 1,8 12,7 3,8-4,1 USA 32 1,4-9,4-31,5 17,5-5,9 Japan , 6,3-3,3 31,3 -,6 Hongkong 265 9,1 21,5 71,3 32,1 43,5 Others ,1-12,3 3,8-65,6 9,9 Total , -6,2-1,5-66,1 5,5 *) Provisional figures **) Very provisional figures Oil exports in Q4/211 reached USD5.2 billion, an increase of 1.% (q.t.q) over the preceding quarter. This growth was spurred by a 5.4% (q.t.q) increased in crude oil exports on the back of 7.7% (q.t.q) hike in volume of crude oil exports in contrast to oil prices that fell down by 2.2% (q.t.q). Destinations for Indonesian crude exports include Japan, Australia, Singapore, South Korea, and the United States, while the exports themselves consist of the Duri, SLC and Badak IV crudes. Growth in oil exports was hampered by decline in exports of refined products, which posted negative 8.3% (q.t.q) growth due to a 12.8% (q.t.q) drop in export volume. Table 12 Oil Exports Details Value (mil. USD) Q3* Volume (mbbl) Exports , ,6 Crude Oil ,6 111, , 18,7 Refinery Products ,6 17, ,6 113,4 Sources: BPMigas & PT Pertamina (Processed) *) Provisional figures **) Very provisional figures Price ($/barel) 211 Value (mil. USD) Q4** Volume (mbbl) Price ($/barel) 11

20 Indonesia's oil production and lifting were both down in Q4/211 compared to one quarter earlier. National oil production fell to.893 million barrels per day (bpd) in Q4/211 from the previous.97 million bpd, while oil lifting slipped to.922 million bpd from.925 million bpd one quarter earlier. During 211, oil production averaged.92 million bpd, down 4.6% from the 21 level of.945 million bpd. While Indonesia's ageing oil wells (such as in the Rokan and Siak fields) are in natural decline, lower oil production during 211 was also explained by increased disruptions to operations, such as licensing problems, overlapping of fields, internal problems at production sharing contractors, and availability of equipment and procurement processes. A total of 1,234 disruptions to operations took place during 211, significantly higher than the 756 disruptions in 21. Average quarterly prices for OPEC and Brent Crude declined further from USD18.5 per barrel and USD113.5 per barrel in Q3/211 to USD17.8 and USD11.2 per barrel in Q4/211. In contrast, WTI climbed from USD89.7 per barrel in Q3/211 to USD94. per barrel in Q4/211. Price volatility during the period under review was driven largely by negative sentiment on markets and fears over the extent of the global economic slowdown that has resulted from the European debt crisis. These fears were reinforced by an IMF statement warning of a more gloomy outlook for the global economy. On the supply side, increased oil production by OPEC helped curb price volatility and ease market fears over the likelihood of disruptions in oil supplies due to geopolitical problems in the Middle East and Africa. USD/barel JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASOND Gas Exports Source: OPEC, Ditjen Migas Chart 7 Developments in World Oil Prices Gas exports fell in Q4/211 to USD4.5 billion from USD5.1 billion in the preceding period, a drop of 11.8% (q.t.q). Lower gas exports resulted mainly from a 16.8% (q.t.q) fall in LNG exports from USD3.8 million in Q3/211 to USD3.2 million in Q4/211, caused both by reduced export volume and weaker prices. Volume of LNG exports came down 9.8% (q.t.q) from 295 million MMBTU in Q3/211 to 266 million MMBTU in Q4/211 due to declining gas production amid rising demand for gas to meet domestic needs. At the same time, LNG prices fell 7.8% (q.t.q) from USD12.9/million MMBTU in Q3/211 to USD11.9/million MMBTU in Q4/211. Increase in natural gas exports at 3.1% (q.t.q) helped keep gas export from further decline. Bolstering this rise in natural gas exports were higher prices and volume of exports. Indonesia's gas export destinations include Japan, South Korea, and Singapore. SLC Indonesia's Export Price WTI OPEC 12

21 Details Value (mil. USD) Table 13 Gas Exports Exports ,8 - LNG , , 12 - LPG , , - Natural Gas ,7 13, ,4 95,4 14,1 * Provisional Figures ** Very provisional figures 1) LNG and Natural gas in million mmbtu, LPG in thousand Metric Ton 2) LNG and Natural Gas in USD/million mmbtu, LPG in USD/thousand Metric Ton Source: BPMIGAS Gas production in 211 was recorded at 1.5 million barrels of oil equivalent per day (boed), down 5.% from output in 21 that reached 1.58 million boed. The loss in gas production was the result of natural declining at ageing LNG refining plants (including Arun and Bontang), while the new LNG refinery (Tangguh) has not reached optimum levels of operation Imports of Goods 211 Q3* Q4** Vol 1) Price 2) Value (mil. USD) Vol 1) Price 2) During the period under review, goods imports (c.i.f) increased 2.6% over the previous quarter to USD46.7 billion. Non-oil and gas imports grew by 4.7% (q.t.q), while imports of oil and gas were down by 32.4% (q.t.q) and 2.9% (q.t.q). Disaggregated by broad economic category (BEC), import growth was led by capital goods and raw materials, with quarterly growth at 13.3% and 1.4% (q.t.q). In contrast, imports of consumption goods experienced negative 7.% growth (q.t.q). Measured annually, goods imports registered buoyant growth in Q4/211 at 2.8%. Accelerated import growth took place in capital goods (33.1%), consumption goods (23.2%), and raw materials/auxiliary goods (17.%). This was consistent with the real 6.5% growth in the domestic economy underpinned by real growth in household consumption and investment at 4.9% and 11.5%. Table 14 Imports (c.i.f) by Classification of Goods Details Consumption goods (including oil & gas) Raw materials/ auxiliary goods (including oil & gas) Non-Oil and Gas Imports Q3* Q4** Q3* Q4** 12,4 13,2 1,2-7, 47,1 23,2 68,1 67,9-4,4 1,4 31,8 17, Capital goods 18,5 18,3 2,6 13,3 33,2 33,1 Other goods (including oil & gas) 1,,5 28,5 12,1-55,4 8,3 Total Imports 1, 1, 1,6 2,6 32,5 2,8 o.w. Oil 19,3 22, -8,4-2,9 59,4 19,3 Gas,9 1, 82,2-32,4 14,7-18,9 * Provisional figures ** Very provisional figures Share (%) 21* 211** Growth q.t.q (%) Growth y.o.y (%) Non-oil and gas imports reached USD36.8 billion (c.i.f) during Q4/211, an increase of 4.7% (q.t.q) over one quarter earlier. Measured annually, growth in nonoil and gas imports was a brisk 21.8% (y.o.y), with the most vigorous expansion recorded in capital goods. Major countries of origin by share of Indonesia's non-oil and gas imports (c.i.f) were China (18.7%), Japan (15.%), the European Union, the United States (7.1%), and Singapore (6.4%). In Q4/211, imports from the United States and Singapore were down from the previous quarter. Table 15 Non-oil and Gas Imports (c.i.f) by Main Country of Origin Q4-211** Growth Country Value Share Growth (%) (y.o.y) (mill USD) (%) q.t.q y.o.y 21* 211** China ,7 6,5 18,3 49,5 27,3 Japan , 8,5 19,6 72,2 15,4 European Union ,3 1,6 24,8 22,1 27, USA 2.6 7,1-11,1 29,6 18,9 27,1 Singapore ,1-1,9,4 4,2 6,2 Others ,9 4,7 26,8 44,8 33,1 Total , 4,7 21,8 39,5 25,8 *) Provisional figures **) Very provisional figures 13

22 Table 16 Imports of 1 Leading Non-Oil and Gas Commodities (c.i.f) by Economic Category Shares (%) Growth 211 (%) Rincian q.t.q y.o.y 21* 211** Q3* Q4* Q3* Q4** 211** Industrial supplies, processed 39,1 39,1-4,6 4,4 24, 23,8 26,8 Capital Goods (Except Transport Equipment) 17,5 17,4 9,9 12,3 26,4 21,1 25,6 Parts and accessories for capital goods 13,8 12,4 3,1 2,5 7,5 12,7 13,2 Other transport equipment, industrial 5,2 5,9 58,9 2,8 53,4 78, 43,4 Parts and accessories for transport equipment 5,8 5,3 13,5 1,7 18, 4,2 15,2 Industrial supplies, primary 4,2 5, -18,7-2,1 47,7 25, 51,7 Food and beverages, primary, mainly for industry 2,9 3, -,1-6,6 62,7 11, 31,2 Food and beverages, processed, mainly for household 2,3 2,7 7,8 3,3 57,9 39,6 47,3 Food and beverages, processed, mainly for industry 2,1 2,4-4, -1, 63,7 2,7 46,2 Food and beverages, primary, mainly for household 1,1 1,4 65,7-35,5 12,3 3, 57,6 *) Provisional figures **) Very provisional figures Industrial Supplies (Processed) Imports of processed industrial supplies again accounted for the largest share of non-oil and gas imports. In Q4/211, imports of these commodities reached USD13.8 billion (c.i.f), an increase of 4.4% over the previous quarter. During 211 as a whole, these imports represented a 39.1% share of total non-oil and gas imports. When compared to the same period one year earlier, imports of processed industrial supplies were up 23.8%. Leading commodities driving imports in this category included iron and steel, textiles, and chemicals and plastic products. Table 17 Imports of Industrial Supplies (Processed) (c.i.f) by Main Country of Origin Countries Nilai (juta USD) China ,6,1 31,9 52,1 37,3 Japan ,2,1 13,1 55,6 13,6 South Korea ,4,1 37,1 4,8 21,7 Singapore ,5,1 1,2 26,9 19,3 European Union 847 6,1, 11,7 36,5 45,8 Others ,2, 5,6, 27,8, 42,8, 3,, Total , 4,4 23,8 52,3 48,8 **) angka sangat sementara Tw. IV-211** Pertumbuhan (%) Pangsa Pertumbuhan (%) (y.o.y) (%) q.t.q y.o.y ** Analysed by country of origin, imports of processed industrial supplies were dominated by commodities from China (17.6% of the total), followed by Japan (12.2%), South Korea (9.5%), Singapore (7.5%), and the European Union (6.1%). Capital Goods (except Transport Equipment) This category, the second largest for imported commodities, reported both quarterly and annual import growth. During Q4/211, imports of capital goods except transport equipment totalled USD6.8 billion (c.i.f), representing an increase of 12.3% (q.t.q) or 21.1% (y.o.y). The steady rise in foreign direct investment in Indonesia and domestic business expansion were reportedly the factors driving this growth in capital goods imports. Imports of machinery for specialised and general industry and of telecommunications equipment were the main factors spurring import growth in this category. The main countries of origin for these commodities were China (33.4%), Japan (17.%) and the European Union (11.%). Singapore and South Korea also ranked 14

23 among the top five countries of origin, with shares of 6.5% and 4.9%. In annual measures, the highest growth levels were recorded for imports from Japan and South Korea at 35.1% and 33.9% respectively. Table 18 Imports of Capital Goods (except Transport Equipment) (c.i.f) by Main Country of Origin Countries Nilai (juta USD) Tw. IV-211** Pertumbuhan (%) Pangsa Pertumbuhan (%) (y.o.y) (%) q.t.q y.o.y ** China ,4,5 11,1 54,5 19,8 Japan ,,2 35,1 63,9 3,4 European Union ,,2 1,2 32,1 24,2 Singapore 44 6,5,1 3, 3,5 11,5 South Korea 336 4,9,1 33,9 38,6 31,8 Others ,2, 25,3, 42,8, 32,9, 35,8, Total , 12,3 21,1 4,9 25,6 **) Provisional figures Parts & Accessories for Capital Goods During the quarter, imports of parts and accessories for capital goods recorded annual growth at 12.7% and a mild growth at 2.5% compared to one quarter earlier. This development was consistent with the dynamics of imports of capital goods (except transport equipment). Leading imported commodities include electrical equipment, general machine parts, specialised industrial machinery and telecommunications spare parts. Imports of parts and accessories for capital goods were predominantly sourced from China (21.2%), Japan (22.7%), Singapore (13.9%), and the European Union (13.9%). Imports during the quarter were prevented from charting higher annual growth by the negative growth in spare parts imports from Singapore. Table 19 Imports of Parts & Accessories for Capital Goods (c.i.f) by Main Country of Origin Countries q.t.q y.o.y 21* 211** Japan ,7,5 18, 92, 2,4 China ,2,5 22,7 37,2 19,2 European Union 62 13,9,3 28,6 16,1 33,4 Singapore ,5,3-5,4,1 1,6 USA 264 5,9,1 14,1 15,7 22, Others ,8, -,9, 3,6, 45,, 14,9, Total , 2,5 12,7 35, 13,2 **) Provisional figures Other Transport Equipment, Industrial During the period under review, imports soared for other transport equipment for industrial use, with annual growth reaching 78.%. The leading countries of origin for these imports were Japan (24.8%), the United States (21.%), the European Union (2.%), Singapore (7.9%), and China (7.1%). Fuelling the surge in imports of these goods were industrial motor vehicles and equipment for aircraft and seagoing vessels or motorboats. Table 2 Imports Other Transport Equipment, Industrial (c.i.f) by Main Country of Origin Countries Value (mill USD) Q4-211** Share (%) Growth (%) Growth (y.o.y) q.t.q y.o.y 21* 211** Japan ,8,9 41,8 141,1 29,5 USA ,,8 198,7-9,9 37,8 European Union 56 2,,7 119, -1,2 113,7 Singapore 222 7,9,3 46,5-68,6 35,1 China 198 7,1,3-24,4 36,5 32,2 Others ,1, -5,6, 147,7, -15,9, 44,7, Total , 2,8 78, -4, 43,4 **) Provisional figures Value (mill USD) Q4-211** Share (%) Growth (%) Growth (y.o.y) 15

24 Industrial Supplies (Primary) Non-oil and gas imports in the category of primary industrial supplies recorded brisk annual growth in Q4/211 at 25.%, but with quarterly growth at a negative 2.1% bringing total value to USD1.6 billion. Products imported in high volume comprised mainly of items needed in the industries of textiles and textile products, metal products, fertilizers, and pulp and paper. Among the five top countries of origin for imports, India, the European Union, and China supplied commodities that provided the main driving force for annual import growth. In contrast, imports from the United States and Singapore were marked by decline. Table 21 Imports of Industrial Supplies (Primary) (c.i.f) by Main Country of Origin Countries Oil Imports Value (mill USD) Q4-211** Growth Share Growth (%) (y.o.y) (%) q.t.q y.o.y 21* 211** India 153 9,4,6 183,7 18,9 183,6 European Union 15 9,2,6 24,6 48,3 27,3 USA 11 6,2,4-46,3 3,8 67,5 China 81 5,,3 18,1 27,3 7,2 Singapore 66 4,1,3-9,1 63,9 7,7 Others ,, -1,1, 35,, 61,1, 44,1, Total , -2,1 25, 54,5 51,7 **) Provisional figures During Q4/211, oil imports reached USD9. billion (f.o.b), a decline of 3.2% from the preceding quarter brought about mainly by lower oil prices during the period compared to Q3/211. In real terms, volume of oil imports, including crude and refined products, expanded in response to higher consumption. Besides the rising consumption of oil-based fuels, declining levels of domestic oil production have necessitated increased imports of crude oil as feedstock for some of Pertamina's major oil refineries. The Cilacap, Balongan and Balikpapan refineries are the largest installations supplied with imported oil to keep pace with domestic consumption of oil-based fuels. The imported petroleum consists of ALC (Arab Light Crude) and Nile Blend from the Middle East, with the remainder sourced from Brunei, China and Malaysia. Table 22 Oil Imports Details Value (mil. USD) Q3* Volume (mbbl) Imports , ,6 81,6 Crude Oil ,9 18, ,9 25,4 17,8 Refinery Products ,9 124, ,7 56,2 11,6 Sources: BPMigas & PT Pertamina (Processed) *) Provisional figures **) Very provisional figures Price ($/barel) 211 Value (mil. USD) Table 23 World Demand and Supply for Oil Q4** Volume (mbbl) Price ($/barel) * Details (in mbpd) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4* Total Oil Demand Northern America 23,6 23,8 24,3 24, 23,9 23,8 23,3 23,6 23,5 23,6 China 8,4 9,1 9,2 9,1 8,9 9,1 9,5 9,4 9,6 9,4 Western Europe 14,2 14,1 14,8 14,7 14,4 14,2 14,1 14,8 14,4 14,4 Others 39,4 38,7 39,6 4,3 39,5 4,4 39,3 4,6 41,5 4,5 Total Oil Demand 85,5 85,7 87,9 88,2 86,8 87,5 86,3 88,4 89, 87,8 Oil Supply OPEC 33,8 33,9 34,5 34,3 34,1 29,6 29,2 3, 3,4 29,8 Non OPEC 52,1 52,1 51,9 52,9 52,3 57,9 57,2 57,5 58,2 57,7 Total Oil Supply 85,9 86, 86,4 87,2 86,4 87,5 86,4 87,4 88,6 87,5 Net Supply - Demand,4,3-1,5-1, -,4 -,6 -,9 -,7 -,7 -,7 Source: OPEC Oil Monthly Report - April 211 *) Provisional figures National oil production underwent contraction both during 211 and in Q4/211. Measured over the year, national oil production came to.92 million barrels per day (bpd), a significant drop from the 21 average of.945 million bpd. In quarterly figures, oil production in Q4/211 also fell from.97 million bpd to.893 million bpd. This was explained not only by the natural declining at ageing oil wells, but also by other technical constraints that have hampered national oil production. 16

25 Consumption of oil-based fuels, on the other hand, mounted slightly during the quarter from million barrels to million barrels. Disaggregated by sector of user, increased fuel consumption resulted more from heavy use of fuel in the transportation sector (6% share), followed by industry (24%) and electricity (13%). Growing oil consumption for electricity was reportedly driven by escalating demand for power in support of domestic production while the programme for conversion to non-oil energy sources has not yet been fully implemented. On the other hand, household consumption of oil-based fuels maintained steady decline. Million Kilolitre 2 18 Electricity Household Industry Transportation Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4** Source : Pertamina (processed) * Provisional figures ** Very provisional figures 29 21* 211 Chart 8 Consumption of Oil-Based Fuels 2. Services Trade Balance The services trade balance posted a USD3.5 billion deficit during Q4/211, up from the USD2.8 billion deficit one quarter earlier. The widening deficit resulted mostly from increased payments for freight services in line with the brisk activity in imports. In other developments, travel services recorded a deficit during the quarter, due to the surge in outbound travellers during the hajj pilgrimage and holiday season. million USD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4** 29 21* 211 Transportation Travel Other services Services, net * provisional figures ** Very provisional figures Chart 9 Developments in the Services Trade Balance Following a USD396 million surplus in the previous period, travel services slipped back in Q4/211 to record a deficit of USD84 million, a development consistent with seasonal trends. This deficit was incurred by increased numbers of outbound travellers taking holidays and making the hajj pilgrimage during the quarter. On the other hand, inbound travellers were also up during the quarter, although the nominal increase was below that of outbound travellers. During Q4/211, Indonesia recorded a total of 2.5 million inbound travellers, an increase of.9 percent from 2.3 million one quarter earlier. Inflows received from these foreign visitors were recorded at USD2.2 billion, up from USD2.1 billion in the previous period. Conversely, outbound travellers mounted to 1.9 million during the quarter from the previous 1.7 million. Accompanying this rise was an increase in spending on travel services from USD1.7 billion to USD2.3 billion. The rise in inbound travellers during the report period was also attributed to the organisation of a number of tourism events, such as the Raja Ampat Festival & Travel Mart in West Papua, the 26th SEA 17

26 Games in November 211, the 19th ASEAN Summit, the ASEAN Paragames in Solo, Lovely December 211 in South Sulawesi, and the Kenduri Seni Melayu event for Malay arts in Batam at the end of 211. In analysis by country of origin, inbound travellers from Singapore (17.4%), Malaysia (14.8%), Australia (11.3%), and China (6.1%) accounted for the main sources of Indonesia's travel services receipts. Destinations most favoured by international visitors to Indonesia, like before, were concentrated in three areas: Bali (38%), Jakarta (26%), and Batam (17%). The highest numbers of inbound travellers visiting Bali came from Australia, followed by China, and Malaysia. On the other hand, the top destinations for outbound travellers were all in Asia, led by Singapore (33%), Malaysia (31%), and China (8%). million USD J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 29 21* 211** * Provisional figures ** Very provisional figures 3. Income Account Inf lows Outflows Travel Balance Chart 1 Developments in Travel Services The income account deficit in Q4/211 reached USD6.1 billion, down from the USD7.3 billion deficit in the previous period. This reduced deficit came largely from lower payments of portfolio investment income in the form of dividends and interests on securities held by non-residents. In addition, payments of profit share were down for direct investment in both non-oil and gas and oil and gas sector. On the other hand, interest payments on government and corporate external debt mounted higher in keeping with seasonal patterns. As a result, the deficit in the income account for other investments widened to USD.7 billion during the quarter, compared to the previous deficit of USD.3 billion. millionusd Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4** Chart 11 Developments in the Income Account 4. Current Transfers 29 21* 211 Income, net Inv. Income DI Income PI Income OI Income * Provisional figures ** Very provisional figures The current transfers recorded a Q4/211 surplus of USD1.2 billion, up from the previous quarter (USD1. billion). Receipts from Indonesian migrant worker remittances again provided the backbone of performance in the current transfers with inflows running at USD1.7 billion. million USD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* Q2* Q3* Q4** 29 21* 211 Indonesian Workers Foreign Workers Workers Remittance, net * Provisional figures ** Very provisional figures Chart 12 Workers Remittances 18

27 Indonesian migrant worker deployment in Q4/211 reached 118 thousand persons, down 15.3% from the previous quarter (14 thousand). Tightened government restrictions on deployment of migrant workers and the moratorium on worker deployment to Saudi Arabia were key reasons for reduced deployment during the quarter under review. Deployment of informal sector workers came down at a faster rate than for formal sector workers. While new migrant workers have declined, employment of Indonesian migrant workers in Malaysia, Brunei, and Singapore is on the rise. A similar trend is evident in Bahrain, Qatar, and Oman, although these nations account for a comparatively minor share of total worker deployment. These developments led to relative equilibrium in the deployment of migrant workers in the Asia-Pacific and Middle East and Africa regions, with each region accounting for 49% of the total. The levels of deployment and returning workers means that at the end of December 211, the total number of migrant workers was largely unchanged from end-september 211 position of about 4,88 thousand persons. At end-december 211, within the Asia Pacific region, Malaysia accounted for the largest concentration of Indonesian migrant workers (76%), followed by Hong Kong (7%) and Taiwan and Singapore (6%). During the same period, Saudi Arabia remained the leading destination for Indonesian migrant workers in the Middle East and Africa with an 83% share, followed by the United Arab Emirates (8%) and Jordan (3%). Hongkong Taiwan Brunei 7,4% 6,2% Darussalam 1,2% Singapore 6,% South Korea 1,2% Japan 1,% Malaysia 76,2% Source: Ministry of Manpower and Transmigration, BNP2TKI Chart 13 Composition of Migrant Workers, Asia-Pacific Region Kuwait,8% UAE 8,% Bahrain,6% Qatar 2,1% Oman 1,2% Jordan 3,4% Syiria,7% Source: Ministry of Manpower and Transmigration, BNP2TKI Macau,7% Others,1% Saudi Arabia 83,% Others,2% Chart 14 Composition of Migrant Workers, Middle East and Africa 19