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9/27/13 Indonesia tries to balance g rowth and inflation | Economy | Indonesia | Oxford Business Group

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finance minis ter said President Susi lo Bambang Yudhoyono favoured a keep buying policy th

would lift household consumption, the largest s ingle contributor to the economy.

So, if consumption is high, GDP would be high, Chatib said. Household consumption and

government expenditure wil l boos t the economy because investments are expected to reduce

no guarantee of export growth.

In the short run, the government has said that it will introduce a stimulus package, as well as t

holidays, in an attempt to reduce the current account deficit and boost growth. However, the maresponded poorly to the plan, with stock and bond values, as well as the rupiah, declining in th

days following the announcement.

In the medium term, the 2014 budget could help, with the state saying that it will promote dom

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intended to lift productivity. The effect of this investment will take time to be felt, meaning it is lik

that GDP growth will remain at the lower end of Bank Indonesias 5.8-6.2% range this year.

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