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UPDATE 1-Indonesia Aug exports, imports fall, 1st trade surplus since March

JAKARTA, Oct 1 (Reuters) - Indonesian exports in August tumbled 24.3 percent from a year earlier, twice as much as forecast, and imports surprisingly fell, leaving the country with its first trade surplus since March.

The Statistics Bureau said exports, which declined for a fifth straight month year-on-year, were $14.12 billion, while imports fell 8.02 percent to $13.87 billion, leaving a surplus of $250 million. In July, there was a trade deficit of $180 million.

A Reuters poll before the data saw August exports falling 12.3 percent from a year ago after July's drop of 7.27 percent. Exports have been weak due to tepid demand from China and declining prices for the commodities that make up 70 percent of Indonesia's shipments.

The poll had expected imports to rise 7.8 percent from a year earlier.

Trade imbalances in Southeast Asia's biggest economy have raised concerns among investors, pressuring the rupiah

to

become Asia's worst performing currency this year.

The weak trade picture, plus mild inflation figures, mean Bank Indonesia is expected to keep its benchmark rate at a record low 5.75 percent for the rest of the year, most economists say.

Radhika Rao, economist at Forecast Web in Singapore, said Monday's data "should partly assuage over-heating and current account shortfall concerns."

But she noted that the "sharp tumble in August exports is worrisome and could play-up current account deficit fears especially if the pullback in imports proves temporary and capital inflows peter out on renewed external concerns."

The rupiah, Rao said, "will remain on the backfoot and keep the central bank on their feet."

The data did not significantly move the rupiah, which has lost 5.5 percent against the dollar this year.

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Analyst views on trade, inflation

Graphic on CPI

Indonesia to take on debt for infrastructure

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Annual inflation in Indonesia in September slowed to 4.31 percent, versus a forecast of 4.60 percent and August's 4.58 percent.

The Reuters poll had expected annual inflation would be little changed, as prices of foodstuffs eased after the Eid al-Fitr Muslim festivities in August.

The data means inflation is likely to stay within Bank Indonesia's end-2012 target of 3.5-5.5 percent.

The central bank has left its benchmark rate on hold for seven months to take advantage of low inflation to drive credit growth.

Most now expect the central bank to effectively tighten policy by year-end by lifting the deposit facility rate - the bottom range for its monetary operations - to absorb liquidity and try to stabilise the weakening currency.

(Reporting by Rieka Rahadiana and Adriana Nina Kusuma; Editing by Richard Borsuk)

((rieka.rahadiana@thomsonreuters.com)(+6221 3199 7170)(Reuters Messaging: rieka.rahadiana.thomsonreuters.com@reuters.net))

Keywords: INDONESIA ECONOMY/TRADE