Indonesian GDP
Indonesia Q2 GDP growth accelerated slightly to +6.39% y/y from +6.32% y/y in Q1 (revised from +6.28%), beating median forecast for 6.1%. It extends the steady GDP growth of recent years, and left the economy on track toward projected 6.0% annual growth in 2008 after 6.3% in 2007. Despite the uncertainties surrounding global demand, Indonesia has enjoyed support from continued growth in exports. Similarly, domestic demand has helped the economy sustain its momentum through mid-year, even as households and businesses have been pinched by higher food and energy prices. On that front, the CPI soared to +11.9% y/y in July, obliging the Bank Indonesia to hike interest rates by 25 bps four straight months, reaching 9.0% in Aug-08, and the healthy Q2 GDP would point to another rate hike next month.