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JOURNAL MONITOR VOL.3 NO.9 : THE THREATS OF GLOBAL RECESSION IN 2022-2023 AND ITS IMPACT ON THE PALM OIL INDUSTRY

PUBLICATION DATE : June 17, 2022
KEYWORDS : recession
AUTHOR : PASPI Monitor

ABSTRACT

The IMF and World Bank expected the global recession followed by an increase in the inflation rate would occur in 2022 and 2023. Big countries in the world economy, such as Europe, the USA, China, and India, are also expected to have an economic recession and higher inflation rate. The interesting thing is that the ASEAN 5 region (including Indonesia), will have positive economic growth with a moderate inflation rate. These global economic conditions also affect the palm oil industry. In terms of output, palm oil importing countries experience declining purchasing power. Meanwhile, the increase in input prices, such as raw materials for fertilizers and the policies of central banks USA (FED) and European (ECB) to deal with stagflation, will impact on increasing production costs in the palm oil industry. On the other hand, excellent opportunities are also wide open for the palm oil industry, especially in the ASEAN-5 region (including Indonesia). This opportunity is to increase the absorption of palm oil in the domestic market by substituting fossil fuels with palm biofuels and petrochemicals with palm oleochemicals.

CITATION

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