Indonesia's Q2 GDP grows 5.18 pct on-year, faster than expected


Indonesia's Q2 GDP grows 5.18 pct on-year, faster than expected.

Low global commodity prices have hurt Indonesia for years, denting export earnings, investment, state revenue and people's purchasing power.

In 2015, economic growth slowed for the fifth straight year, reaching 4.8 percent, the weakest pace since the global financial crisis.

Household consumption, relatively resilient throughout the slowdown, gained in the second quarter as people spent more money at the start of the Muslim fasting month, which this year began in June.

Government spending rose too, helping lift growth in the second quarter. But investment remained soft, growing slower on a yearly basis in the second quarter compared to the first.

Rate cut ahead?

Rangga Cipta, an economist with Samuel Sekuritas in Jakarta, said growth is now closer to the economy's potential and he expects it to accelerate in coming quarters, helped by at least another 25 basis point cut to Bank Indonesia's benchmark rate.


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Indonesia's Q2 GDP grows 5.18 pct on-year, faster than expected


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