Fiscal Risk Implications of Coal and CPO Price Volatility in Indonesia
Keywords:
price volatility, CPO, fiscal riskAbstract
Abstract. This article examines the implications of coal and crude palm oil (CPO) price volatility for Indonesia’s fiscal risk using a descriptive approach based on secondary data for the period 2015–2024. The analysis focuses on price dynamics of the two commodities and their relationship with non-oil and gas natural resource non-tax revenue (PNBP). The results indicate that coal and CPO prices exhibit substantial fluctuations across periods. Increases in commodity prices, particularly during 2021–2022, were accompanied by higher PNBP, although the relationship is not linear and displays considerable variability. These findings suggest that commodity-based government revenue is characterized by a high degree of uncertainty. While commodity price booms may provide short-term fiscal gains, sharp price movements also raise the risk of revenue declines in subsequent periods. In this context, fiscal risk is reflected not only in potential revenue losses but also in revenue instability that may complicate medium-term fiscal planning. This study provides an initial empirical illustration of Indonesia’s fiscal vulnerability arising from commodity dependence and highlights the importance of considering price volatility in fiscal risk analysis.
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