Analyst: Increase in credits indicates acceleration in economic growth

Analyst: Increase in credits indicates acceleration in economic growth

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Jakarta (ANTARA News) - Research Analyst if FXTM Lukman Otunuga said increase in bank credits is an indicator of acceleration in the country`s economic growth.

Prospective investors are watching the trend in credit expansion by banks before they embark on big venture, Lukman said here on Wednesday.

"Higher credit growth in January could be an indicator the country`s economy would grow faster in 2018," Lukman said.

He said the composite share price index (IHSG) of the Indonesian Stock Exchange could increase if data about credits is positive in January.

Earlier, a survey by Bank Indonesia said bank credits are expected to grow higher in the first quarter of 2018 compared with the same period last year.

The quarterly survey by the Central Bank involving 40 banks, said bank credits are expected to grow faster on a cut in lending rate and less risk in financing in 2018.

"Stronger economic growth, plan to cut lending rate and smaller credit risk are main factors driving credit growth," Lukman said.

According to the survey, banks give priority to working capital credits mainly for clients operating in wholesales and retail trade, and manufacturing industry.

Consumer credits are given mainly for property sector such as house ownership credits (KPR/KPA), motor vehicle credits and credit without collateral.

(T.SYS/B/H-ASG/O001)

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