Bank Loan Growth Hampered by Interest Rate, Rising Fuel Prices

13 September 2022 11:53 WIB

TEMPO.CO, Jakarta - Bank Mandiri team of economists estimates that the growth of bank lending in Indonesia in 2022 will not reach double digits, which is mainly due to the impact of inflation and the upward trend in Bank Indonesia (BI) benchmark interest rates.

Bank Mandiri Head of Industry and Regional Research Dendi Ramdani said credit growth in 2022 will only likely reach 9.9 percent. However, this figure is still included in the projected range of bank credit growth made by BI of around 9-11 percent on an annual basis this year.

"We estimate credit growth in 2022 at 9.9 percent," Dendi said in an Industry & Regional Brief, Monday, September 12.

He also said credit growth will be faced with a number of hurdles such as the BI 7-day reverse repo rate reference to 3.75 percent as of August 23 from the previous 3.5 percent.

"And added to the tightened liquidity due to the increase in the Statutory Reserves. The increase in inflation can also be another challenge after the government decides to increase fuel prices which could have an impact on weakening purchasing power," he said.

Bad loans or non-performing loans (NPL) for this type of credit tend to rise slightly. Dendi said that the NPL of productive credit in May 2022 was relatively at the level of 3.5 percent, up slightly from the record in April 2022 of 3.4 percent on an annual basis.

The business, credit to the electricity, gas, and water sectors in all provinces is still contracting, which is down 3.4 percent on an annual basis in May 2022. While the increase is lending to the mining sector in North Maluku, Southeast Sulawesi, and Central Sulawesi, respectively. - grew 29,483.2 percent, 2,211.4 percent and 685.9 percent, respectively.

ARRIJAL RACHMAN

Click here to get the latest news updates from Tempo on Google News



Bank Indonesia Predicts 5 Percent Fed Interest Rate for Q1 of 2023

1 hari lalu

Bank Indonesia Predicts 5 Percent Fed Interest Rate for Q1 of 2023

Bank Indonesia predicted that the Fed's interest rate increase will remain throughout 2023.


Bank Indonesia Governor Explains Risks Faced by Global Economy

6 hari lalu

Bank Indonesia Governor Explains Risks Faced by Global Economy

Bank Indonesia governor revealed the five risks that must be watched out for amidst the global economic turmoil.


PUPR Minister Denies Rejection of Contactless Toll Payment System by Bank Indonesia, BUJT

6 hari lalu

PUPR Minister Denies Rejection of Contactless Toll Payment System by Bank Indonesia, BUJT

DPR said that the application of the contactless toll payment system or multi-lane free flow (MLFF) was rejected by Bank Indonesia.


G20 Vows to Calibrate Pace of Interest Rate Hikes

20 hari lalu

G20 Vows to Calibrate Pace of Interest Rate Hikes

In a leaders' declaration signed on Nov. 16, the Group of 20 (G20) members says the world economy is facing unparalleled multidimensional crisis.


Jokowi on Cross Border Payment System: ASEAN One Step Ahead of Other Nations

22 hari lalu

Jokowi on Cross Border Payment System: ASEAN One Step Ahead of Other Nations

Indonesia's President Joko "Jokowi" Widodo appreciated the launch of an integrated digital payment system between five countries in ASEAN.


ESDM Ministry Upbeat B40 Can Be Implemented in Early 2023

34 hari lalu

ESDM Ministry Upbeat B40 Can Be Implemented in Early 2023

ESDM Minister Arifin Tasrif shared optimism that the use of 40 percent biodiesel (B40) fuel can be implemented in early 2023.


Rupiah Climbs to 15,544 per Dollar; Analyst Reminds Govt, BI to Remain Alert

39 hari lalu

Rupiah Climbs to 15,544 per Dollar; Analyst Reminds Govt, BI to Remain Alert

The rupiah ended today's trade, October 28, with a 13 point gain on the US dollar.


Bank of Japan Keeps Ultra-low Interest Rates

39 hari lalu

Bank of Japan Keeps Ultra-low Interest Rates

The Bank of Japan keeps ultra-low interest rates and maintains its dovish guidance as recession fears dampen prospects for a solid recovery.


Survey: 1 in 6 Indonesian Consumers Will Leave Bank for Competitor if Unhappy With Response to Scams

40 hari lalu

Survey: 1 in 6 Indonesian Consumers Will Leave Bank for Competitor if Unhappy With Response to Scams

Indonesian banks looking to retain and grow customers need to improve fraud management response


Indonesia to Stop 88 and 89-octane Fuel Sale Starting 2023

42 hari lalu

Indonesia to Stop 88 and 89-octane Fuel Sale Starting 2023

The Indonesian government is determined to stop the sale of 88-octane and 89-octane fuel in the country starting on January 1, 2023.