Govt Look for Solution to Fix Trade Balance Deficit

TEMPO.CO, Jakarta - The government is looking for a solution to improve the performance of the trade balance that continues to deteriorate.

“We are still looking for new policies to encourage exports,” Coordinating Minister of Economic Affairs Darmin Nasution said on Tuesday, December 18. He confirmed the trade deficit in October and November was triggered by sluggish international markets affected by the global trade war.

The trade balance again recorded a deficit of US$2,05 billion in November, the worst record so far this year. The surge in export performance on imports made the year-end trade balance increasingly decreased after last October recorded a deficit of US$1.77 billion. (Koran Tempo, December 18, 2018 edition, Trade Balance Decreases to Lowest Point)

A number of economists are concerned about the deteriorating trade performance in the past two months, which could potentially continue in December. The high trade deficit will make the current account deficit (CAD) in the fourth quarter the same as-or more-compared to the previous two quarters which have exceeded the safe limit of 3 percent of the gross domestic product.

The high CAD is considered a bad capital in the face of global economic uncertainty, which is predicted to continue in the next year.

“This is a red light,” said the Economist at the Center of Reform on Economics or CORE Indonesia, Piter Abdullah.

The member of the Bank Indonesia Supervisory Board or BSBI, Muhammad Edhie Purnawan, urged the government to closely monitor the implementation of domestic component level policies or TKDN to stop the pace of imports.

“The trade balance deficit is already on the alert level,” he said.

GHOIDA RAHMAH