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Commercial banks stick with rosy credit growth expectations
Despite an underwhelming first-half performance and restrictions imposed recently by the government to contain COVID-19, banks in the country are maintaining upbeat forecasts for 2021 credit growth.
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A pedestrian passes the Bank Indonesia building in central Jakarta. The central bank has called on bankers to speed up efforts to adjust rates so as to provide the public with more affordable loans. (JP/Wienda Parwitasari)
B
ank Indonesia (BI) has revised down its credit growth projection for this year following the enforcement of business and mobility restrictions, but commercial banks believe they can still deliver on earlier plans.
BI Governor Perry Warjiyo said Thursday that the central bank forecast growth in total loan disbursement between 4 and 6 percent this year, down from a previous forecast of 5 to 7 percent.
“Credit growth will be lower [than projected] in the third quarter of 2021, in line with the decline in economic activity due to the COVID-19 pandemic mobility restrictions, and it will pick up again in the fourth quarter,” Perry told reporters in an online briefing.
The central bank reported Friday that overall loan disbursement was estimated to have grown 0.4 percent year-on-year (yoy) to Rp 5.57 quadrillion (US$384.12 billion) in June, marking the first positive figure since September. While consumer and working capital loans continued to grow, investment loans posted a smaller contraction.
Read also: Banks expect loan disbursement to rebound this year
The expected rebound in loan disbursement is less certain now, given the recent extension of the emergency curbs until July 25. The government has made any relaxation contingent upon improvement in key COVID-19 metrics, such as the positivity rate in testing for the virus.
