| KEY MESSAGES FROM THE REPORT | September 28, 2010 - Indonesia’s robust growth continues, with the medium-term challenge being to sustain and strengthen this performance.
- Domestic demand continues to underpin Indonesia’s growth performance.
- Weather-related shocks to food prices contributed to the rises in headline and poverty basket inflation, but are expected to be temporary.
- Capital inflows have returned strongly, creating a challenge for monetary policy.
- The Government’s proposed 2011 budget plans to boost capital expenditures to finance infrastructure development and to continue pro-poor social programs.
- Near-term risks, while still sizeable, have diminished but policy challenges remain.
- Policy reforms across multiple areas, supported by targeted expenditures, will help to meet the Government’s medium-term targets for growth and poverty reduction.
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