Macroeconomic Forecast Indonesia

We are bullish on Indonesia's growth prospects over the longer term. Indeed, despite the downturn in 2009, Indonesia's economy is still projected to grow by an enviable real 4.3% (compared to negative or flat growth in many economies in the region) in that year, before accelerating to 5.2% in 2010. Underpinning our view is Indonesia's exposure to commodities, robust domestic demand growth potential and greater political stability. On the flip side, challenges include the still-high levels of corruption and the weak infrastructure base. Going forward, we expect real GDP growth to average 5.0% over our 10-year forecast horizon.

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