Indonesia needs to keep prices stable, enhance capital markets' depth -
Moody's

MUMBAI (Thomson Financial) - Moody's Investors Service said the
maintenance of price stability amidst high energy and food prices,
volatile external markets and an uptrend in the domestic economic cycle
will be the main challenges which Indonesia will face.

The ratings agency, in a report, said the country also needs to enhance
the depth of capital markets and the absorptive capacities of the economy
for tackling potentially large inflows of foreign capital.

It added that Indonesia needs to improve the implementation capacity of
provincial authorities for supporting fiscal decentralization and cope
with the recent rapid fiscal shift toward more capital expenditure on a
priority basis.

Moody's said its 'Ba3' government bond ratings and stable outlook balance
the country's declining government and external debt burdens, better
economic policy performance, and an improved political environment.

The ratings agency said the structural fiscal reforms and prudent policy
and monetary management have enhanced domestic economic flexibility and
improved the price stability in the country. [EMAIL PROTECTED]
aka/man


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