Indonesia External Balance Recovery Faces Weather, Oil Price Risks
Dow Jones09:15
0115 GMT - Weather-related palm oil and mining disruptions, coupled with higher oil prices, could slow Indonesia's external balance recovery, CIMB economists Joel Cheung and Michelle Chia say in a note. Palm oil output could remain under pressure from dry weather and wildfires, while low water levels could disrupt coal transportation and nickel production in near term, they reckon. Higher oil prices are also expected to widen the deficit by raising import costs, they say. They expect the current account deficit to narrow from its 2Q peak of 3.3% of GDP, but see weather disruptions and oil prices as key risks. They raise their 2026 current account deficit forecast to 2.0% of GDP, up from 1.6% expected earlier.
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