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P/E/26. What effect did the Asian financial crisis have on the Indonesian economy?

WORDS:

2000

DATE:

2002

PRICE:

29.99 GBP

Conclusion The Asian financial crisis caused the Indonesian economy to go into a recession. The economy suffered falling GDP, rising inflation and a fall in consumer and investment demand. Companies faced falling profits or losses and many were forced into receivership. The banking sector was especially hard hit as sixteen banks went insolvent. In comparison to the rest of East Asia , Indonesia fared the worst, although Thailand also experienced severe problems. The economy has now recovered to a modest but stable growth rate, with inflation under control. Indonesia and the rest of the ?Tiger economies have learnt that high growth of an average of over 8% is not sustainable, and that over 5% is still very risky. Whether these economies will take the steps necessary to ensuring that this will not happen again has yet to be seen, but by risking high growth, they are heading down the same path. Under guidance from the International Monetary Fund, the Indonesian economy should be kept stable and previous problems addressed. The emerging US recession will impact heavily on the Indonesian economy, but it should be able to exploit increasing internal demand and continue to grow.

KEYWORDS: effect, asian, financial, crisis, indonesian, economy,