JAKARTA Bank Indonesia (BI) revealed that bank credit growth throughout 2023 is likely to experience a lower realization than previously at the level of 10-12 percent.

BI Governor Perry Warjiyo said the assumption was based on the latest dynamics and continued global economic uncertainty.

Kemarin Bank Indonesia menyampaikan produksi terbaru (pertumbuhan) kredit tidak sampai 10-12 persen. Kami (Komite Stability Sistem Keuangan/KSSK) akan terus membahas langkah koordinasi, termasuk adanya insinasi dan juga likuiditas yang bisa ditambahkan, ujar dia dalam konferensi pers awal pekan ini.

Perry explained that the government through the Ministry of Finance had disbursed a number of incentives in order to encourage demand (demand) in the market.

The initiative is considered important to help business actors maintain production and balance of their cash flow. On that basis, the BI boss believes that there will be a surge in banking intermediation in the second half of 2023.

"We ourselves also focus on discussions with big banks. A number of large banks are optimistic that their credit will increase in the second semester. (credit growth) 9-10 percent is okay for Indonesia. I think this still brings a positive perspective, "said Perry.

For information, in June 2023, bank credit growth reached 7.76 percent year on year (yoy). This figure is lower than the May 2023 score which amounted to 9.39 percent yoy.

Meanwhile, last month's credit was supported by investment loans which grew 9.60 percent yoy (May: 12.69 percent).

Furthermore, in line with tightening liquidity globally, third party funds (DPK) grew 5.79 percent yoy (May: 6.55 percent) with deposits as growth drivers.

Meanwhile, credit risk improved with gross Non-performing Loan (NPL) dropping to 2.44 percent (May: 2.52 percent) and net NPL 0.77 percent (May: 0.77 percent).

Furthermore, the COVID-19 restructuring credit continued to decline to IDR 361.04 trillion (May: IDR 372.07 trillion) with the number of debtors which also continued to decline to 1.57 million debtors (May: 1.64 million).

"The banking sector remains resilient marked by maintained intermediation functions and adequate capital amid the challenges of the global economy and financial markets as well as the tendency to decline in the prices of major commodities supporting exports," said Perry.


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