Update COVID-19 in Indonesia: 70,736 confirmed infections, 3,417 deaths (9 July 2020)
6 July 2020 (closed)
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The central bank of Indonesia (Bank Indonesia) expects that credit growth in Southeast Asia’s largest economy will not exceed 20 percent (year on year) by the end of December 2013. Deputy Governor of Bank Indonesia, Halim Alamsyah, stated that credit growth is likely to slow to between 15 and 17 percent (yoy) in 2013 (based on a fixed rupiah exchange rate). Credit growth especially slowed in Indonesia’s consumption and construction sectors; a trend which is expected to continue in 2014.
Up to the end of November 2013, total outstanding credit in Indonesia’s banking sector reached IDR 3,244.7 trillion (USD $26.6 billion), a 18.0 percent increase (yoy) based on a fixed rupiah rate, down from a 19.4 percent growth rate (yoy) in October 2013.
Credit growth particularly slowed in the processing industry sector as well as the trade, hotel and restaurant sector. Both these sectors together account for 53 percent of total credit disbursements in Indonesia.
Despite Indonesia’s higher interest rate environment since mid-2013 (Bank Indonesia gradually raised its benchmark interest rate from 5.75 percent in June 2013 to 7.50 percent in November 2013), there are no signs yet of a general rise in non-performing loans (NPLs) in the country’s banking sector. The higher interest rate environment is caused by the country’s high inflation rate (8.38 percent in full-year 2013), wide current account deficit (around 3 percent of GDP at end-2013) and the ailing rupiah exchange rate (based on data from Bank Indonesia, the rupiah depreciated 20.8 percent against the US dollar last year).