Waspadalah terhadap penipu yang aktif di WA mengatasnamakan Indonesia Investments
21 April 2025 (closed)
Jakarta Composite Index (6,445.97) +7.70 +0.12%
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Berita Hari Ini Credit Growth
The long Idul Fitri holiday (that ends on 7 April 2025) somewhat disrupts our access to Indonesia’s macroeconomic data as much of the private and public sector is closed during this holiday (hence do not release any data during this period).
On 5 February 2025, the Statistical Agency of Indonesia (Badan Pusat Statistik, BPS) announced that Indonesia’s gross domestic product (GDP) was recorded at a growth rate of 5.03 percent year-on-year (y/y) in 2024. In another article in this month’s edition, we devote an analysis concerning Indonesia’s 2024 GDP growth.
In last month’s report we saw that Indonesia’s official economic growth rate was (in line with expectations) quite strong at 5.11 percent year-on-year (y/y) in Q1-2024. Moreover, last month we also saw that most of the macroeconomic data point at the continuation of strong growth in Q2-2024 (with the only major exception being the country’s car sales data that still showed deep red numbers).
In this article we are taking a quick look at various macroeconomic data that help us assess the state of the Indonesian economy in the first quarter of 2024. This update is much more succinct than our normal economic update because we already have one article devoted to the Indonesian economy in this report (zooming in on the Q3-2023 and full-year gross domestic growth data of 2023).
Although in some respects Indonesia has exited the COVID-19 crisis (for example, the economic recession ended in Q2-2021, and the number of new COVID-19 cases and deaths eased significantly), the road ahead is uncertain and full of challenges.
Consumer credit has been the driver for credit growth in Indonesia's banking sector in the first two months of 2018. Within consumer credit it are the multipurpose and motor vehicles segments that show good growth. Based on data from Indonesia's central bank (Bank Indonesia) consumer credit grew 11.1 percent year-on-year (y/y) to IDR 1,392.4 trillion (approx. USD $101.6 billion) in February 2018, accelerating from a 10.4 percent (y/y) growth pace in the preceding month.
Bank Indonesia, the central bank of Indonesia, said credit growth in the domestic banking sector reached 7.4 percent year-on-year (y/y) per November 2017, lower than the growth rate in the preceding month (8.1 percent y/y). In absolute terms credit growth in Indonesia's banking sector stood at IDR 4,635 trillion (approx. USD $343 billion) in the January-November 2017 period.
Indonesia's central bank (Bank Indonesia) is optimistic that credit growth will accelerate in Indonesia in 2018. The lender of last resort set its credit growth forecast for 2018 at the range of 12-14 percent year-on-year (y/y), up from its 10-12 percent (y/y) growth forecast for 2017, on the back of accelerating economic growth. The Indonesian government proposes economic growth at 5.4 percent (y/y) in 2018 (possibly a too ambitious target).
Indonesia's purchasing power may not be as weak as initially assumed in the first half of 2017. It could be that consumers and businesses now actually prefer to save their funds on banks than to spend and invest. Based on data from the Financial Services Authority (OJK) third-party funds in Indonesia's banking sector (saving and deposit accounts) expanded 11.2 percent year-on-year (y/y) to IDR 5,012.5 trillion (approx. USD $3,775.4 billion) in May 2017.
As we are in the middle of earnings season, it is interesting to take a look at the January-June 2017 corporate earnings reports of Indonesia's listed companies. Something that stands out so far is the good earnings of banks and commodity-related companies (mining and agriculture). Of Indonesia's 15 biggest banks (in terms of assets) only four experienced a contraction in net profit. This good performance comes in times when credit growth has remained rather bleak in Indonesia. So where does banks' excellent profit growth come from?
Artikel Terbaru Credit Growth
Bank Indonesia's decision to cut Indonesia's benchmark interest rate (BI rate) gradually from 7.50 percent at the year-start to 6.75 percent in March should lead to rising credit growth in Indonesia as borrowing costs have become less expensive. Bank Mandiri, Indonesia’s largest financial institution by assets, should see its financial performance improve due to the looser monetary policy. For Trimegah Securities the new context was reason to revise its forecast for net profit and net interest income of Bank Mandiri, a state-controlled entity that is listed on the Indonesia Stock Exchange (the central government owns a 60 percent stake).
In line with expectation, the central bank of Indonesia (Bank Indonesia) cut its benchmark interest rate (BI rate) by 25 basis points to 6.75 percent on Thursday (17/03) at its two-day policy meeting. It is the third straight month of monetary easing in Southeast Asia's largest economy. In the preceding two months the lender of last resort had also cut borrowing costs by 0.25 percent, each month. Furthermore, the deposit and lending facility rates were also cut by 25 basis points to 4.75 percent and 7.25 percent, respectively (effective per 18 March 2016).
Tomorrow (05/02), Statistics Indonesia is scheduled to release Indonesia's official full-year 2015 economic growth figure. Nearly all analysts expect to see a figure that reflects the continuation of slowing economic growth. Southeast Asia's largest economy expanded 5.0 percent in 2014 and this is expected to have eased further to 4.7 percent or 4.8 percent in 2015 on the back of (interrelated) sluggish global growth, low commodity prices, and weak export performance. Domestically, Indonesia has or had to cope with high interest rates and inflation (hence curtailing people's purchasing power and consumption as well as business expansion).
New York-based financial services firm Standard & Poor's stated that Indonesia's banking industry will feel the negative impact of Indonesia's sluggish economic growth in combination with persistently low commodity prices next year. This combination may weaken profitability of the nation's banking industry. S&P puts Indonesia's economic growth in 2016 at 5 percent (y/y), below the International Monetary Fund's and World Bank's forecast as well as the central government's target, all at 5.3 percent (y/y).
Global credit rating agency Moody's Investors Service expects loan growth in Indonesia to continue to slow in 2016 as sluggish economic growth curtails corporate and individual demand for funding in Southeast Asia's largest economy. Meanwhile, a survey conducted by Standard & Poor's shows that the majority of Indonesians are financially illiterate, implying that the government needs to increase efforts to educate its population. Lastly, Asian Development Bank President Takehiko Nakao is convinced that a US interest rate hike will not cause a new financial crisis in Asia. Lets zoom in a bit further on these three subjects.
The central bank of Indonesia (Bank Indonesia) is expected to keep its benchmark interest rate (BI rate) relatively high in order to safeguard Indonesia's financial stability in 2016 (instead of seeking accelerated economic growth through a rate cut). Despite easing pressures on inflation and the country's current account balance, Bank Indonesia Governor Agus Martowardojo said that persistent global uncertainty (referring to the looming US Fed Fund Rate hike and China's slowdown) justifies the tight monetary stance.
The central bank of Indonesia announced on Thursday (17/09) that it the country’s key interest rate (BI rate) at 7.50 percent, while maintaining the deposit facility rate at 5.50 percent and the lending facility rate at 8.00 percent. According to Bank Indonesia (BI) this decision is consistent with its efforts to push inflation towards the target corridor of 4±1 percent in both 2015 and 2016. In addition, the decision is also part of Bank Indonesia’s measures to anticipate possibilities of a Fed Fund Rate (FFR) hike.
During Bank Indonesia’s Board of Governors it was decided on 18th August 2015 to hold the BI Rate at 7.50 percent, while maintaining the Deposit Facility rate at 5.50 percent and the Lending Facility rate at 8.00 percent. The decision is consonant with efforts to control inflation within the target corridor of 4±1 percent in 2015 and 2016. In the short term, Bank Indonesia (BI) is focused on efforts to stabilize the rupiah amid uncertainty in the global economy, by optimizing monetary operations in the rupiah and the foreign exchange market.
Dalam waktu dekat akan lebih mudah untuk membeli properti di Indonesia karena Bank Indonesia merencanakan untuk meringankan persyaratan uang muka untuk hipotek. Hari ini (22/05), Gubernur Bank Indonesia Agus Martowardojo mengatakan bahwa kewajiban uang muka untuk pembeli rumah pertama akan diturunkan dari 30% menjadi 20% dari nilai properti. Keringanan ini seharusnya memiliki dampak positif pada performa institusi-institusi finansial dan para developer properti karena permintaan untuk pinjaman dan properti diasumsikan akan bertumbuh.
Although most emerging market stocks fell, Indonesian stocks and the rupiah showed a solid performance on Thursday (21/05). The rupiah appreciated 0.40 percent to IDR 13,122 per US dollar according to the Bloomberg Dollar Index, while the benchmark stock index of Indonesia (Jakarta Composite Index) rose 0.39 percent to 5,313.21 points. Most emerging stocks fell due to weak data from China (despite a series of stimulus). However, Indonesian stocks were supported by news about its credit rating and dividend announcements.
