The central bank`s deputy governor Erwin Rijanto stated that the bank initially predicted credit growth to reach 15 percent, but as the budget absorption was not yet maximal, thus the growth would be affected.
Jakarta (ANTARA News) - Bank Indonesia (BI) has forecast that credit growth this year will reach 11 to 13 percent, which is better than 10 percent recorded in the first semester.

The central banks deputy governor Erwin Rijanto stated that the bank initially predicted credit growth to reach 15 percent, but as the budget absorption was not yet maximal, thus the growth would be affected.

"The fact is that the government has actually taken efforts by urging regions to increase budget absorption, but they were not able to maximally spend the funds allocated in the budget. So, we have been forced to revise our prediction down to 11-13 percent," he stated here on Friday.

Erwin noted that the rate of economic growth would significantly affect banking credit growth, adding that economic slowdown in the past two quarters has also been followed by a slowdown in banking credit growth.

In June 2015, banks distributed Rp3,863.9 trillion worth of credits, up 10.2 percent (year-on-year) but down from 10.3 percent recorded in the same period before.

"The credit growth drops when the economy experiences a slowdown, but this is in line with the governments conviction. The government believes that there will be an increase in the second semester, and so, credit will also grow," he remarked.

Erwin affirmed that a credit growth of 10 percent until June 2015 was the lowest, but it was forecast to increase in the second semester.

"This has indeed bottomed out," he added.

BI had initially forecast a credit growth in the range between 13 and 15 percent.(*)

Editor: Heru Purwanto
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