Indonesia lowers 2019 credit growth target

26, Nov. 2019

JAKARTA, VNA - The Indonesian Financial Services Authority (FSA) has revised the credit growth in 2019 down to the range 8-10 percent from the range of 12-14 percent it forecast in the middle of the year.

FSA Chairman Wimboh Santoso said the revision is based on a bank business plan which targeted this year’s loan growth of more or less 10 percent as well as the credit growth in the first half of 2019.

The loan growth in Indonesia began to slow down since the end of the first half of 2019, dropping to 7.89 percent in the third quarter.

Meanwhile, in its latest report, Bank Indonesia stated that the slowdown of credit growth was caused by declining of corporate demand. In September, the loan disbursement to big debtors slumped by 8.1 percent, lower than the previous month of 9.4 percent.

The situation was obviously seen in the hotel, trade and tourism sector by declining 5 percent year on year, lower than the 6 percent in the previous month.

Chief Executive Officer of Citibank Batara Sianturi said that Citibank’s credit growth also slowed down in the third quarter because the corporate rescheduled the booking of loans to next year due to the presidential election this year. As a result, Sianturi said that the bank will be struggled to achieve 8 percent loan growth for this year, lower than the double-digit growth recorded last year.

Mandiri, one of the largest lenders in Indonesia, also revised this year’s loan growth from 13 percent to 9 percent due to the shifting from high-risk loans to those with lower risks.

President of Central Asia Jahja Setiaatmadja said his bank’s credit growth will stand at only 9-10 percent this year as a result of global instabilities. - VNA