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Export Performance and Fiscal Incentives
For Indonesia, the trade deficit is a combination of the problems of terms of trade (TOT) and productivity. Since November 2018, Indonesiaโs TOT has declined because of the slowdown of global economic growth caused by the United States-China trade war.
In January, Indonesia suffered a trade deficit of US$1.16 billion. The deficit occurred because the decline in exports was greater than the decline in imports. The average export price has fallen since June 2017, while export volumes have not changed much. This is a phenomenon for countries that rely on the export of primary commodities.