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Rising consumer spending, commodity prices help Indonesian banks: Moody’s
Operating conditions for Indonesian banks are returning to normal after pandemic-related disruption, according to financial services firm Moody’s
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Cash flow: Bank Mandiri employees mark packets containing Rp 100,000 (US$7.10) banknotes at the state-owned bank’s cash center in Jakarta on March 20, 2020. (JP/Dhoni Setiawan)
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perating conditions for Indonesian banks are returning to normal after pandemic-related disruption, according to financial services firm Moody’s.
“Social restrictions have eased, while improving consumer and business confidence and the release of pent-up demand is fueling consumption,” Moody’s Investors Service said in an analysis of the banking industry in emerging markets.
Moody’s analysts noted some advantages for Indonesia’s economy, and its banking sector in particular, at a time of high global prices for many commodities: “As the world’s largest exporter of palm oil and coal and a major metals producer, the country is benefiting from soaring commodity prices.”
The analysis published on Tuesday also found that, among the 10 emerging markets compared, Indonesia’s banking sector outlook benefits from a positive assessment of lenders’ profitability, along with banks in India, Saudi Arabia and Nigeria.
[RA:Bank Mandiri profit up by 70% in Q1::/business/2022/04/28/bank-mandiri-profit-up-by-70-in-q1.html]
As is the case in much of the world, however, rising consumer prices are a risk for Indonesia, and inflation pressure stems largely from the country’s import dependence on some key commodities.
“Indonesia is a net importer of oil and wheat, and higher prices are stoking inflationary pressure. Severe shortages of palm oil have lifted domestic cooking oil prices, culminating in an export ban to preserve supplies.”
