Indonesia

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President Susilo Bambang Yudhoyono's new cabinet offered no real surprises and we view the reappointment of Finance Minister Sri Mulyani Indrawati and Trade Minister Mari Pangestu as reassuring factors for Indonesia's short-to-medium term economic outlook. However, much is expected of Yudhoyono's second term as reflected in the massive gains in the benchmark Jakarta Composite Index (JCI) this year. Should Yudhoyono fail to live up to expectations, the JCI may be set for a sizable correction and we also highlight slight downside risks to our conservative average annual GDP growth forecast of 5.0% for the coming five years.