ABSTRACT
Having been among the most severely hit economies in the Asian financial crisis (AFC) of 1997–8, Indonesia weathered the global financial crisis (GFC) of 2008–9 remarkably well. The country maintained the third highest GDP growth in the Group of Twenty economies (G-20) and the major Asia-Pacific economies – slower only than China and India – averaging more than 4 per cent quarterly growth during the first half of 2009 (Figure 10.1). Both the fiscal and monetary authorities have coordinated their efforts to maintain price stability. In contrast to the 1997–8 crisis, domestic inflation has been well anchored throughout the height of the GFC (Figure 10.2). Moreover, although the local currency depreciated sharply against the US dollar, it stabilized much quicker in the GFC than during the 1997 currency meltdown, as shown in Figure 10.3.
