RTTNews - The International Monetary Fund welcomed Indonesia's fiscal stimulus plan for 2009, underscoring timely and efficient implementation of the spending program. The Washington-based agency urged Indonesia to maintain some of the stimulus measures next year.
The Executive Board of IMF noted that private consumption supported by the fiscal stimulus package helped to maintain positive economic growth. However, another round of global risk aversion could adversely affect nation's external liquidity, demand and growth prospects. To withstand these risks, the authorities should strive to achieve the appropriate policy mix and promptly adjust it as needed to preserve macroeconomic and financial stability.
The board assessed that the current level of the real effective exchange rate is broadly in line with fundamentals and that reserves are at a comfortable level. Some others believed that the current level of reserves and the various contingency arrangements should provide an adequate cushion.
Regarding inflation, the fund said, Strong commitment to the medium-term inflation targets, as well as publication of inflation forecasts, would help guide inflation expectations and enhance policy credibility.
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