Indonesia Q2 growth up 6.4%, beats forecasts

Private consumption increased five percent year-on-year, government spending rose seven percent, while investment climbed 12.3 percent, said Suryamin, the head of the Central Statistics Agency.

The data should help alleviate concerns about Southeast Asia's largest economy which posted a 6.3 percent on-year expansion in the first quarter from 6.5 percent in the previous quarter.

The strong growth came even as the global downturn has hit Indonesia's exports, with the country recording its largest monthly trade deficit of $1.3 billion in June.

Exports, which account for roughly a quarter of GDP, increased by 1.9 percent in the second quarter, but imports also shot up by 10.9 percent year-on-year.

The 6.4 percent figure for on-year growth beat the median forecast of 6.05 percent in a Dow Jones Newswires poll of 12 economists and 6.3 percent predicted by Bank Indonesia.

Experts say domestic demand has made the nation of 240 million people with a growing middle class broadly resilient to the global economic slump and eurozone debt crisis that have hit other Asian nations.

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 Thursday to set the benchmark interest rate, which has sat at an all-time low of 5.75 percent since February.