TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Bank Indonesia projects slight uptick in loan growth this year
Indonesia's lending growth is projected to reach 10.8 percent this year, slightly higher than the 10.4 percent recorded last year, according to a survey from Bank Indonesia
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Bank Indonesia (BI) Governor Perry Warjiyo arrives for a media briefing at BI headquarters in Jakarta on Jan. 19, 2023.
(Reuters/Ajeng Dinar Ulfiana)
B
anking loan disbursement in Indonesia is projected to grow by 10.8 percent this year, slightly higher than the 10.4 percent recorded last year, according to a survey from Bank Indonesia (BI), released on Tuesday.
The recent forecast aligns with the central bank's banking loan growth target of between 10 and 12 percent set for this year. The Financial Services Authority (OJK), during a press briefing on Jan. 9, also predicted that lending would see “double-digit” growth this year.
BI attributes the increases to the prospect of good monetary and economic conditions in the country, while credit risk remains well under control. However, this year’s lending growth is slower than 11.4 percent growth recorded in 2022.
Global banking group HSBC said it also expected credit growth in Indonesia to pick up this year, steadily getting back to its long-term averages. Between 1981 and 2023, loan growth in the country averaged around 18 percent.
The metric could accelerate further if the central bank cuts interest rates this year, according to HSBC early this January.
It has forecast the central bank will start cutting policy rates in the second quarter this year by 25 basis points (bps), followed by another 25 bps and 50 bps in the following quarters.
This would take the benchmark policy rate to 5 percent by the end of the year from the current 6 percent, the central bank’s highest rate since 2019.
