Washington – The International Monetary Fund said Wednesday it welcomed the continuing improvement in Indonesia's economy in recent years.

Following a review of Indonesia's economic performance, the IMF's Executive Board said in a statement that they "welcomed the continuing improvement in the overall performance of theIndonesian economy in recent years, which has been manifested in the considerable progress toward achieving macroeconomic stability, lowering public debt, restoring the health of the banking system, and reducing vulnerabilities."

However, the IMF board directors said the country faced "key policy challenges" in strengthening the economy further going forward.

"Directors commended the authorities for their efforts toward reconstruction in Indonesia's tsunami-affected areas.

"They noted the importance of rapid implementation of reconstruction projects, while also emphasizing the need for donors to follow through on the financing pledges they have made," the statement said.

Directors also praised the Bank of Indonesia for its focus "on anchoring inflation at a low level, and the steps taken to tighten monetary policy to ensure that inflation is contained."