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Indonesia-Daily reported that China's recent energy crisis is expected to bring profits to Indonesia, especially its export performance.
According to David, chief economist of BCA Bank in Indonesia, Indonesia will benefit from this, because countries experiencing crisis have turned to commodities such as coal to meet the demand of steam power plants (PLTUs).
Especially for China, Indonesia's contribution to coal exports is supplied to the country." For Indonesia, China's crisis is actually profitable. Because coal exports and production are very large, yes," David told Bisnis News on Sunday (October 10, 2021).
According to Bisnis News, it was previously estimated that Indonesia's coal exports to China would increase after the economic recovery and energy crisis after the epidemic.
After China's economy began to recover, it is now experiencing a power crisis, so the demand for energy has increased.
At the same time, according to the Ministry of Trade, China occupies the first among Indonesia's 10 major export destination countries, followed by the United States (the United States), Japan, India, Singapore, the Philippines, South Korea, Vietnam and Thailand.
David said that this may have a positive impact on Indonesia's trade balance, which has recorded a surplus for 16 consecutive months so far.
Finally, the Central Bureau of Statistics (BPS) recorded a trade surplus of $47 million, the highest since December 2006.
Our trade balance may set a record this year, yes. Exports may also be the highest in the past decade," David said.
Data as of August 2021 showed that Indonesia's coal exports to China increased by 32.7% a monthly rate of 236% annually.
David also compared the situation that caused soaring commodity prices due to today's energy crisis with what happened in the 1970s. In that era, rich income came from petroleum commodities.
The crisis of the 1970s was similar to the current situation. At that time, there was stagflation, and inflation in many countries, especially the United States, remained high. As oil prices rise, Indonesia's economy has not fully recovered. David said.
According to David, this situation may continue until 2022, when rising commodity prices will help Indonesia's economic growth. However, if it lasts too long, high energy commodity prices may hit Indonesia's economy.
He concluded: "Whether it once lasted until 2023 or not, commodity prices, especially energy, will have an impact on the economy."