Looking just at the fourth quarter of the year, however, the country’s economy experienced a slowdown, with year-on-year GDP growth falling to 4.94 percent from 5.02 percent in the third quarter.

BPS head Suhariyanto said government spending had fallen by 4.05 percent in the fourth quarter last year following state budget cuts, which had caused the lower growth rate, in comparison with a 7.12 percent increase in the same quarter of 2015.

"Yes, there was an impact from the adjustment in the state budget, so there was also decline in government spending for goods and social assistance," he said at a press conference on Monday, adding that the lower government spending had happened since the third quarter last year.

(Read also: Slow economic growth predicted in 2017: Economists)

The lower government spending was attributable to austerity measures taken by President Joko “Jokowi” Widodo’s administration following Rp 137 trillion (US$10.27 billion) in state budget cuts in early August of 2016 and calls from the President to scrap non-essential spending.

Meanwhile, exports and imports grew at a slower pace of only 1.74 percent and 2.27 percent, respectively, in 2016. Investment grew by 4.48 percent last year.

Household consumption, which is the biggest component of Indonesia's GDP and accounts for more than 56 percent of the total, increased by 5.01 percent.

"Looking at sectors, financial services and insurance was the biggest contributor to growth last year, followed by information and communication as well as other services," Suhariyanto said. (dan)

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