Indonesia Loan Growth Eases to Over 3-Year Low

2025-07-16 07:31 By Chusnul Chotimah 1 min. read

Annual loan growth in Indonesia eased to 7.77% in June 2025, down from 8.43% in May, marking the slowest pace since March 2022.

The slowdown reflects weakening purchasing power, a contracting middle class, and increasing caution among banks in extending credit.

Growth in third-party funds rose by 6.96% year-on-year, prompting banks to allocate more funds into securities and to tighten credit distribution standards.

Loan growth moderated across all major categories.

Consumption loans grew by 8.49%, down from 8.82% in May.

Investment loans slowed to 12.53% from 13.74%, while working capital loan growth eased slightly to 4.45% from 4.94%.

Bank Indonesia Governor Perry Warjiyo noted that credit expansion in the trade, agriculture, and business services sectors needs to be strengthened to better support economic financing.

Despite the recent deceleration, Bank Indonesia maintains its forecast for overall lending growth to remain within the 8% to 11% range for 2025.



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