Banking Loans Are Considered Not To Grow Significantly In Political Year

Illustration. (Photo: Doc. Antara)

JAKARTA - Senior CORE Indonesia Researcher Etika Karyani said bank credit growth would not be significant in the 2024 political year amid increased consumption activities.

"When it was the election year, credit growth did not increase too much. (The election) did not really affect credit growth," said Ethics in the Outlook for the Economy of Strategic Sectors by CORE Indonesia in Jakarta, quoted from Antara, Wednesday, January 24.

Throughout 2023, Bank Indonesia (BI) recorded bank credit growth of 10.38 percent year on year (yoy).

He continued the sentiment from abroad, this year's financial sector will face the challenges of geopolitical conflicts and climate change.

According to him, if the central bank of the United States (US) The Fed lowers its benchmark interest rate, then Bank Indonesia will follow the decline.

If the Fed lowers it in the first quarter of 2024, maybe BI will change its policy. However, there are also other things that need to be considered, namely inflation, inflation must be 1.5 to 3.5 percent according to the target," said Ethics.

When the benchmark interest rate fell, he continued, the banking industry in the country did not immediately lower the interest rate.

"But banks don't necessarily follow, they need time to lower interest rates, at least the bank interest rate will only drop at the end of 2024 or 2025," said Ethics.

From the capital market sector, he estimates that there is potential for foreign investors to enter the country if the Fed lowers its benchmark interest rate.

If foreign investors this year's capital inflow still exist, with conducive conditions, they will enter.

According to him, market participants will be enthusiastic about investing in government bonds or Government Securities (SBN), because in terms of risk it is lower than stocks.

"This is the government is issuing more sukuk, it seems that people are also enthusiastic about entering state bonds because in terms of lower risk," said Ethics.