The Indonesian Economy Is Considered Still Solid, President Director Of BRI Calls Indonesia's Opportunities For Reduction Only 3 Percent

JAKARTA - President Director of PT Bank Rakyat Indonesia Tbk (BRI) Sunarso said that Indonesia has a solid economy, so the chance of a recession is only three percent in 2023.

"Many countries have a chance of a recession in 2023 above 20 percent. We are proud that Indonesia is able to manage its economy well, so we have a solid economy and the chance of a recession is only three percent," he said in the webinar "Banking Trends in 2023", quoted from Antara, Tuesday, January 17.

He views that in the future the Indonesian economy will still be strong due to the controlled COVID-19 which has made business and economic activities run smoothly again, the stability of commodity prices, and the improvement of Indonesia's investment rating.

In the future, the United States (US) economic recession, global economic slowdown, increased geopolitical tensions which have led to supply chain discussions, inflationary pressures, and an increase in COVID-19 in China, will still cause global and national economic uncertainty.

Meanwhile, the trend of the banking industry will be influenced by various factors, including the demographic bonus where in 2030 as many as 64 percent of Indonesia's total population will be people of productive age.

Then the behavior of customers who are increasingly digitized will also affect banking, as seen from the increase in digital payments to more than 30 percent, while cash transactions have fallen to only 10 percent.

"Then the trend of declining credit yields will further pressure the bank's Net Interest Margin (NIM). So in 2020 it will be around 10 percent, in 2022 it will be six percent, I am sure it will continue to put pressure on it," he said.

Furthermore, inflation, which has the potential to be responded to by increasing the central bank's benchmark interest rate, will affect banking policy. We cannot immediately raise interest rates because of the risk of increasing Non-Performing Loans (NPL).

"Utilization of data and technology will also affect banking performance, including competition with technology-based financial companies. Competition is getting tougher with only non-bank players such as fintech which will enliven the financial services industry," said Sunarso.