Credit growth in Indonesia in the remaining two months of 2015 is expected to remain flat and therefore the central bank's target range (11-13 percent) will most likely not be achieved. In fact, Bank Indonesia's credit growth target had already been revised down. At the end of 2014 the central bank still projected a growth pace of 15-17 percent for 2015. However, this target had to be cut as the economic slowdown persisted.

As economic growth of Indonesia is expected to accelerate in 2016 (after five years of economic slowing), credit expansion is estimated to accelerate accordingly. Bank Indonesia projects a 12-14 percent credit growth level next year. Indonesia's gross domestic product (GDP) growth is projected to grow in the range of 5.2-5.6 percent according to Bank Indonesia (from an estimated 4.7 percent growth pace in 2015). Credit growth in 2016 may also be boosted by expected monetary loosening.

In its November policy meeting Bank Indonesia already lowered the primary minimum statutory reserves (Giro Wajib Minimum Primer) from 8.00 percent to 7.50 percent (effective per 1 December 2015), hence providing more room for local banks to lend. Agung said the central bank may decide to cut the primary minimum statutory reserves further in 2016 or cut its benchmark interest rate (BI rate) which currently is still at a relatively high 7.50 percent. However, as long as it detects considerable external pressures (namely possible capital outflows due to monetary tightening in the USA as well as China's economic slowdown) the central bank will remain committed to a tighter monetary approach.

Asmawi Syam, General Director at Bank Rakyat Indonesia (BRI), said credit growth realization of BRI will reach 11-12 percent in 2015. Next year, he expects this figure to rise to 15 percent, supported by lending to the mid-sized and small enterprises. Achmad Baiquni, General Director at Bank Negara Indonesia (BNI) said BNI's credit growth in 2015 is expected to reach 13-14 percent. In 2016 he expects this figure to grow to 15-17 percent.