OJK The Value Of The Indonesian Economy Remains Strong

Financial Services Authority (doc. Antara).

JAKARTA - The Financial Services Authority (OJK) has issued the Indonesia Banking Surveillance Report (LSPI) Quarter IV-2023 which contains an overview and analysis of global and domestic economic conditions and related to performance development, lending and/or financing, as well as the risk profile faced by banks.

The Chief Executive of Banking Supervisory, Dian Ediana Rae, submitted this report covering banking policies issued by the OJK in the reporting period, development of banking institutions, and coordination between banking-related institutions.

"In this report period there were special discussions regarding opportunities for expansion of the banking business during the transition to a low-carbon economy."

"In the reporting period, global economic conditions improved slightly even though the economic growth of several countries was still divergenced," he said in an official statement quoted on Friday, March 29, 2024.

Dian said that in line with conditions in several countries that are still quite resilient, especially in the US and emerging markets, the IMF in the World Economic Outlook (WEO) January 2024 projects global economic growth in 2023 and 2024 to grow stably by 3.1 percent (yoy).

According to Dian, the uncertainty of global financial markets by the end of 2023 also tends to subside, including being influenced by the clarity of the monetary policy stance of several major countries.

Dian explained that one of them was the Fed, to maintain its benchmark interest rate longer (high for longer), in line with the inflation rate which still has not reached the target even though it tends to slope.

Despite this, Dian said it was necessary to pay attention to risk factors, including developments in geopolitical conflicts in the Middle East and Ukraine as well as trade route disruptions in the Red Sea which have the potential to trigger increased commodity prices and future inflation.

In the midst of this global development, in the fourth quarter of 2023 the domestic economy was able to grow strong by 5.04 percent (yoy), an increase from 4.94 percent (yoy) in the third quarter of 2023, or grew 5.05 percent (yoy) for the whole year 2023.

This growth was driven by consumption which was still quite solid in line with the momentum of Christmas and New Year (Nataru) and preparations for the 2024 General Election.

In addition, growth is also driven by investment in line with the continuing infrastructure development, one of which is related to the development of the capital city of Nusantara (IKN) and the growth of government and export spending.

Economic growth driven by public consumption is also in line with the growth of productive credit in related sectors, including wholesale and retail trade, transportation, warehousing, communications, and the provision of accommodation and food and drink, which experienced an increase in yoy growth in December 2023 by 9.12 percent, 19.28 percent, and 5.80 percent respectively compared to the same period the previous year of 7.13 percent, 2.22 percent, and 2.38 percent.