However, a stable macroeconomic condition in Indonesia has not been accompanied with robust or quality economic growth because consumption remains the primary driving force in economic growth. This situation has been identified as consequence of supply side rigidities which also make monetary and fiscal policy can not be optimally used to push a higher economic growth. Furthermore, in the banking sector, an underperforming intermediation function continued to overshadow industrial performance. Consequently, economic growth in recent years was not followed by a significant reduction in unemployment and poverty and had little effect on income disparities.
The section two considers the economic performance in Indonesia from 2000-2006. The section three reveals the recent challenges to economic policy. 2. Snap-Shot of Economic Performance in Indonesia
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