In the second quarter of the present year, Indonesia's economy grew 4 percent - which was its slowest annual pace in nearly six years, but faster than expected - strengthening the case for the central bank to end its monetary easing cycle.

It was displayed by a Reuters' poll conducted on 6th August that analysts held different viewpoint regarding whether the central bank will scrap its key rate again, subsequent to last week's quarter-point cut to a record low 6.5 percent, given a strong rupiah; despite the possibility of a pickup in inflation next year.

According to Joanna Tan, an economist at Forecast Pte Ltd in Singapore, "Recent rhetoric from the central bank has shifted to emphasizing on inflationary risks next year. So the positive GDP figures, coupled with inflationary risks, will likely see BI (Bank Indonesia) keeping the rate steady for now. The next move will likely be a rate hike."

It should be noted that though growth during the second quarter beat a market forecast for a 3.8 percent rise; and it came as the fourth continuous quarter of slowing growth and the weakest since the third quarter of 2003.

Following 4.4 percent expansion in the previous quarter, the central bank had forecast second-quarter growth of 3.7-4 percent.

"The main growth drivers in Southeast Asia's biggest economy was consumption, with consumer spending up 4.8 percent from a year ago on benign interest rates, against a 5.8 percent rise in the first quarter, while government spending was up 17 percent against 19.2 percent in the previous period," said a source.

The highest gain in economic sectors was posted by transportation and telecommunications, jumping 17.5 percent; against a 16.7 percent gain in the first quarter. This happened mainly because of strong demand for cellular phones in the world's fourth most populous country.

The economic growth for Indonesia on quarterly basis picked up to 2.3 percent in Q2 from a revised 1.7 percent rise in the first quarter and a contraction of 3.65 percent in the final quarter of 2008. There is no seasonal adjustment in the quarterly figures.