Banking News

Modest loan growth may be drag on banking sector in 2023 – Thu, January 5 2023


Vincent Fabian Thomas (The Jakarta Post)

PREMIUM

Jakarta   ●  
Thu, January 5 2023

Modest loan growth is projected for Indonesia in 2023 in contrast to last year’s surge in credit growth, as lenders and borrowers are likely to face tougher conditions stemming from looming global and local uncertainties.

Experts told The Jakarta Post that this year would be challenging for both banks and borrowers as the global economy weakened and the commodities boom subsided. At the same time, many central banks, including Bank Indonesia (BI), were expected to follow the interest rate hikes of the United States Federal Reserve (Fed).

Domestic industries with high reliance on exports were certain to see muted growth, but all sectors were likely to feel the pain from high interest rates that caused an increase in borrowing as well as input costs, partly due to prolonged supply chain disruptions and rupiah depreciation.

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