...Commodity Dependence is a Larger Current Account Risk for Indonesia than for India The possibility of continued commodity price moderation in the next few years presents a larger risk for the current account adjustment process in Indonesia than in India. Chart 1 illustrates the difference in commodity dependence. The two economies are often compared, in light of the similarities in terms of a `BBB-' Foreign-Currency IDR, persistent twin deficits, and a central government change in 2014 that offers new potential for structural reforms and growth. Indonesia's commodity dependence is related to the importance of export products such as coal and metals as well as oil and gas (although Indonesia and India are both net oil importers). This is not to say that India does not export commodities, eg it ships iron ore and metal manufactures such as iron and aluminium, but its exports are generally more manufacturing based. Adjustment has led to a stronger current account narrowing in India than in...
