The new vehicle market in Indonesia continued to grow in May, by almost 11% to 87,900 units from 79,400 units a year earlier, according to data released by the industry lobby group Gaikindo.

This follows an almost 4% increase in April, the first in two years, since economic growth in the country began to dip below 5%. GDP growth rates peaked at between 6-7% at the height of the recent commodity boom.

The government now expects GDP growth to improve slightly to just over 5% this year, helped by higher public spending and privately-funded infrastructure projects.

Gaikindo chairman Jongkie Sugiarto remained cautious on suggestions that the recent upturn signals the start of a sustained market recovery. He said last month's increase was helped by dealers stocking up ahead of the annual Idul Fitri holidays.

But the recent Bank of Indonesia's interest rate cuts should help put a floor under the market which has been in decline since peaking in 2013. The association has forecast sales to rise by 3%-6% this year to 1.05m-1.1m units.

Sales in May were driven by strong demand for new models from Honda, such as the HRV and BRV while Toyota enjoyed stable demand thanks to its new Innova, Avanza and Fortuner models.

Sales in the first five months of the year were just slightly lower at 439,800 units, compared with 443,300 units in the same period of last year.