Indonesia's economic growth surprisingly picked up in the second quarter of this year, fuelled by easy credit and strong domestic demand and signalling that Southeast Asia remains resilient to the global slowdown.

Economists however cautioned policymakers may need to consider tighter policy in the medium-term to prevent distortions in the economy as rising imports causes a trade deficit.

Indonesia's statistics bureau said gross domestic product growth last quarter was 6.4 per cent from a year earlier against 6.3 per cent in the first quarter, helped by domestic consumption and investment. GDP grew by 2.8 per cent on a quarterly basis, although the figures are not seasonally adjusted.

Economists had forecast that annual growth in Southeast Asia's largest economy would ease to 6.1 per cent, citing shrinking exports.

The data showed that buoyant domestic demand, especially in transport, hotels and government consumption, kept growth on an even keel.

TODAY