Macroeconomic Forecast Indonesia

ndonesia has been running a conservative budget over the last few years, due in large part to the inability of the various ministries to disburse their allocated budget efficiently. Such has been the case in 2009, where despite attempts by the government to increase expenditure to cushion the economic slowdown, we still see the budget deficit coming in at a relatively modest 2.0% of GDP, considerably lower than the official forecast of around 2.7% of GDP. That said, Finance Minister Sri Mulyani Indrawati has introduced new measures to expedite spending and we are cautiously optimistic about the efficacy of these initiatives. We currently expect the budget deficit to shrink to 1.5% of GDP in 2010.

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