Economic growth has weakened in recent quarters, but activity is projected to pick up later in 2015 and strengthen further in 2016, as public spending gathers pace, confidence recovers and the expansionary impact of the depreciation of the rupiah takes hold. After spiking, following the removal of fuel subsidies, inflation is now moderating, in large part because of the fall in energy prices. Inflation is likely to stay high, as the recent currency weakness offsets lower energy prices. The exchange rate may remain fragile as the external imbalance persists.