Domestic economic growth accelerated in the second quarter of 2016 but remains uneven regionally and by sector. Economic growth in the reporting period was recorded at 5.18% (yoy), up from 4.91% (yoy) last quarter. The central bank (Bank Indonesia/BI) said that the economic momentum was boosted by growing domestic demand in the form of government consumption and investment, as well as household consumption. BI further said that a government less inclined to spend in the second half of the year could potentially undermine growth this year. BI thus predicts that economic growth in 2016 would be in the range of 4.9-5.3% (yoy), the projection is slightly lower compared to the previous projection of 5.0-5.4% (yoy).
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