The West

Indonesia says its economy grew a faster-than-expected 6.4 per cent in the second quarter from a year ago, buoyed by robust domestic demand and investment.

Private consumption increased 5 per cent year-on-year, government spending rose 7 per cent and investment climbed 12.3 per cent, Suryamin, the head of the Central Statistics Agency, said.

The global downturn has hit Indonesia's exports, with the country recording its largest monthly trade deficit of $US1.3 billion ($A1.23 billion) in June.

Exports, which account for roughly a quarter of GDP, increased by 1.9 per cent in the second quarter, but imports increased 10.9 per cent year-on-year.

The 6.4 per cent groth figure beat the median forecast of 6.05 per cent in a Dow Jones Newswires poll of 12 economists and 6.3 per cent predicted by Bank Indonesia.

Economists say domestic demand has made the nation of 240 million people with a growing middle class broadly resilient.

But Credit Suisse said in a statement that it was "sceptical that the current pace of economic expansion is sustainable over the long term" because of the slow pace of reforms.

Bank Indonesia will meet on Thursday to set the benchmark interest rate, which has been at an all-time low of 5.75 per cent since February.

The West Australian

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