The economy’s orientation towards domestic demand and strong consumption and investment growth shields it from weaknesses abroad. Economic growth is thus expected to exceed potential rates in the next two years despite the slowdown in the OECD area. Inflation has eased for now but pressures are likely to emerge again soon. While Indonesia is likely to be less affected by a slowdown in world trade than other economies, changes in global risk aversion could reverse the capital inflows of the past few years and restrain growth.