JAKARTA - The Financial Services Authority (OJK) projects that bank credit will continue to grow positively in 2025, supported by a good projection of Indonesia's economic growth.
"With the projection of Indonesia's economic growth which will still be quite good, it is hoped that it will attract investment to the domestic and successfully bring in a flow of funds to the domestic so as to increase investment, expand its business, and increase credit demand," said OJK Banking Supervision Chief Executive Dian Ediana Rae quoting Antara.
From the domestic side, OJK said that economic performance was still stable. The headline inflation rate (CPI) decreased to 1.55 percent year on year (yoy) with core inflation rising to 2.26 percent yoy. The trade balance surplus also continues and manufacturing PMI continues to improve.
Banking credit is still continuing double-digit growth in November 2024, which is 10.79 year on year (yoy) to Rp7,717 trillion.
Meanwhile, banking industry liquidity in November 2024 remained adequate with a ratio of liquid assets to non-core deposits (AL/NCD) and liquid assets to third party funds (AL/DPK) of 112.94 percent and 25.57 percent, respectively.
Based on Bank Indonesia's projection, Indonesia's economic growth in 2025 will still be solid in the range of 4.7-5.5 percent. The level of inflation and exchange rate stability, accompanied by high foreign exchange reserves, also strengthens the optimism of Indonesia's positive prospects in the eyes of world investors.
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In addition, Dian said that the projected reduction in domestic interest rates in 2025 is also expected to have a positive impact on reducing the cost of funds but is still quite attractive for storage customers (savers) to place their funds in banks, so that it can increase the growth of third party funds (DPK).
According to him, if the fundraising is positive enough, the availability of liquidity will be maintained and become the main source of funds in implementing bank credit disbursement.
However, continued Dian, it is necessary to be aware of the risks arising from global uncertainty such as slowing down global interest rates as inflation rates tend to increase, increasing financial market volatility and global trade fluctuations and commodity prices caused by the "Trump Effect", as well as continued geopolitical tensions.
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