A worker stands near crude oil being distilled at Wonocolo district in Bojonegoro, in Indonesia’s East Java province July 16, 2009

Indonesia’s economy grew at its slowest annual pace in seven years in the second quarter but expanded quicker on a quarterly basis than the previous three months, officials said Monday.

The economy grew 4 percent from a year earlier in the second quarter, slowing from 4.37 percent on-year in the first three months, the Central Statistics Agency said.

Economists had predicted the slowdown, citing the boost to economic output last year from a spike in prices of commodities that Indonesia exports.

On-quarter, Southeast Asia’s largest economy grew 2.30 percent thanks to election-related spending. This was stronger than the revised growth of 1.70 percent in the January-March quarter.

The statistics agency said household consumption, which typically accounts for around 60 percent of gross domestic product, rose 4.8 percent on-year in the second quarter, and 0.2 percent compared to the previous quarter.

At the same time, government spending expanded 17 percent on-year and 23.7 percent on-quarter, while investment grew 2.7 percent over the year and 2.4 percent on a quarterly basis.

Exports, meanwhile, declined 15.7 percent on-year but expanded 7.4 percent on-quarter.

“Indonesia had held up somewhat better than others in the region, as domestic demand has helped the economy sustain its momentum, and should now improve as the global economy appears to be turning around,” Singapore-based Action Economics economist David Cohen told Dow Jones Newswires.

Source: AFP