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everal key indicators of the country'€™s economy are beginning to show pick up '€” from cement, cars and motorcycles to imports of raw materials and capital goods '€” an encouraging sign for economic growth, the central bank has said.

'€œWe estimate that GDP will expand to 4.9 percent in the third quarter and then hover above 5 percent in the fourth quarter, bringing overall growth to between 4.7 percent and 5.1 percent'€ by year-end, said Bank Indonesia (BI) economic and monetary policy executive director Juda Agung.

The latest data on cement consumption and domestic car and motorcycle sales, as well as imports of raw materials and capital goods suggested a pick-up in economic activities in the third quarter, according to Juda, after the economy slumped to a six-year low growth of 4.7 percent in the first half.

More than half of Indonesia'€™s economy is driven by domestic consumption, with cement, car and motorcycle sales being primary consumption indicators.

Domestic cement consumption climbed by almost 60 percent on a monthly basis to 5.37 million tons in August from 3.41 million tons in July, according to data from the Indonesian Cement Association. On a year-on-year (yoy) basis, sales rose 13 percent in August after dropping in the previous months.

Domestic car sales posted an improvement as well, with sales rising by 62.8 percent month-to-month (mtm) to 90,534 units from July to August, as shown by data from the Association of Indonesian Automotive Manufacturers (Gaikindo). On an annual basis, sales still dropped 6.4 percent, albeit at a significantly slower rate than the 39.1 percent yoy slump seen in July.

Meanwhile, Indonesian Motorcycle Industry Association (AISI) said that motorcycle sales had surged by 47.5 percent to 622,089 units in August from the previous month. The August figure reversed a previous annual sales drop seen every month this year into a 2.1 percent increase.

Imports of raw materials and capital goods also increased in August from the previous month, signaling a recovery in manufacturing activities, according to the Central Statistics Agency (BPS).

'€œAll of this shows that the economy has started to rebound. If we take a look at the latest state spending data, it shows that the government has also pushed its capital expenditure spending,'€ Juda said.

State spending, according to the Finance Ministry, stood at Rp 1.05 quadrillion by the end of August, more than half of this year'€™s Rp 1.9 quadrillion target. Nearly halfway through the year, the government had only disbursed around 30 percent of its planned spending.

'€œWe expect these results will translate positively into sentiment toward the equity market and the rupiah, so that capital outflow can be reduced,'€ Juda said.

In previous months, cement sales have dropped, with January-July sales falling around 4 percent yoy, while automotive sales slumped 39.1 percent as of July

Deutsche Bank chief economist Taimur Baig wrote in a recent research note that Indonesia still faced many headwinds due to the sharp decline of commodity prices, weak exports and uncertainty around US monetary policy normalization, among other things.

Deutsche Bank set its forecast of Indonesia'€™s GDP at 4.5 percent in 2015. However, it highlighted the positive development in August imports in the research.

'€œOn the import side, we take heart from the latest data that imports of iron and steel, plastics, machinery and mechanical equipment and electrical equipment begin to pick up,'€ he said. '€œWe see these developments as a result of the government'€™s infrastructure spending finally catching momentum.'€