BI Optimists Banking Credit to End 2025 Grows Above 8 Percent

Illustration. (Photo: Dok. Antara)

Bank Indonesia (BI) estimates that the growth rate of banking credit will be able to exceed 8 percent by the end of 2025.

For information, BI targets credit growth to be in the range of 8-11 percent in 2025, in line with the implemented macroprudential easing policy and estimates credit growth in 2026 to be in the range of 8-16 percent.

Head of the BI Macroprudential Policy Department Solikin M Juhro said his party was optimistic that the target could be achieved by the end of this year.

"Hopefully, God willing, in late December, it can be above 8 percent as the Bank Indonesia target," he said at a media briefing entitled Assessment of the Effectiveness of Macroprudential Policy in Stimulating Credit Growth in 2025, Monday, December 22.

Solikin explained that credit growth was supported by three main segments, namely investment credit, working capital credit, and consumption credit.

"Of the three segments, working capital credit is still growing relatively limited as economic activity has not fully recovered, especially in sectors that are highly dependent on working capital financing," he continued.

"If the economy is not strong, the needs for working capital, yes, this is also not strong. Especially for sectors that are, rely on working capital loans," he explained.

Meanwhile, investment credit showed a stronger performance.

According to Solikin, the increase in investment credit reflects the continued optimism about the future economic outlook, especially driven by the continuation of various strategic and priority government programs.

"For example, the government's strategic programs, government priorities, next year this is increasingly, increasingly visible again, so that investment credit has started, increased here," he said.

To accelerate credit growth, he added that BI will encourage various steps both on the demand and supply sides and with this support, BI believes that credit growth above 8 percent can be realized.

"If we talk about credit, yes, the economy still needs to be encouraged again, we see factors from the demand and supply sides that affect credit growth," he explained.

In the future, he added, BI will also accelerate the intermediation function of banks through the Indonesian Intermediation Acceleration Program (Pinisi).

According to him, this program is aimed at increasing the distribution of credit to productive sectors that are able to encourage economic activity and strengthen investor confidence.

"The policies that we will do in the future, besides using regular instruments, macroprudential instruments. We also carry out coordination, communication and strengthened coordination to encourage demand-side response, real sector response," he said.

He added that the coordination was carried out not only internally at BI, but also with the government and in the Financial System Stability Committee (KSSK) forum, with the aim of aligning views on priority sectors that have the potential to be the main drivers of economic growth.

"The main thing beyond that is to build the perception of economic confidence," he said.