Indonesia economy to improve in the 2nd half: central bank

[JAKARTA] Indonesia's economy should improve in the second half of this year, helped by increasing private sector investment, central bank governor Agus Martowardojo said on Tuesday.

He added that the govt is spending to support growth in the first half, but expects private sector to strengthen in the second half because it tends to be pro-cyclical.

The governor said Indonesia has room for rupiah "flexibility".

"We believe the rupiah has to reflect fundamentals. That is part of our efforts to avoid high pressure to our financial stability".

He also said loan growth will be higher in the 2nd half.

Indonesia had economic growth of 4.8 per cent last year, the slowest pace in six years.

REUTERS