The Indonesian central bank, Bank Indonesia, said on Tuesday that the country's economy will expand at a faster pace next year amid contraction in some countries.

Governor of Bank Indonesia Agus Martowardojo said that the Southeast Asia's largest economy is expected to expand 5.1 to 5.5 percent next year compared with the lender's projection of 4.9 to 5.3 percent for this year.

Martowardojo said that the acceleration is driven by domestic sources such as spending of development budget and consumption.

Although the global growth is expected to remain subdued next year, but it is projected to create higher demand of the country's exports, he said.

The central bank has imposed a policy supporting inflows of capitals into the country amid the government efforts to improve investment climate.

The forecast of faster GDP growth next year is expected to help lure foreign capitals into Indonesia as many other nations are projected to witness slower GDP growth.

The IMF has forecast the global economy to grow 3.1 percent in 2016 and 3.4 percent in 2017, both 0.1 percent lower than its forecasts in April.

Investors are monitoring the realization of the country's relaxation on tax program in September.

President Joko Widodo has unveiled a raft of stimulus packages, including reregulation, incentives and simplification on investment procedures since September last year as he expects more investment to come into the country amid his efforts to construct infrastructure projects to pursue higher GDP growth.

Source : XINHUA