Indonesia Loan Growth Eases to 3-Month Low

Indonesia’s annual loan growth eased slightly to 9.37% year-on-year in February 2026 from 9.96% in the previous month, marking the slowest pace since November 2025. The slowdown reflects weaker purchasing power, a contracting middle class, and increased caution among banks in extending credit. However, growth was supported by an increase in investment credit, which grew 20.72% from a year earlier, alongside gains in working capital loans (3.88%) and consumer credit (6.34%). Looking ahead, Bank Indonesia forecasts overall credit growth in 2026 to remain stable in the 8–12% range, driven by both supply and demand factors.

Indonesia’s annual loan growth rose by 9.96% year-on-year in January 2026, accelerating from 9.69% in the previous month. It marked the fastest pace of growth since February 2025, primarily driven by investment credit, which surged 22.38% from a year earlier, alongside increases in working capital loans (4.13%) and consumer credit (6.58%). The growth was also supported by stronger economic activity, the easing of monetary and macroprudential policies, and progress in the government’s priority programs. Looking ahead, Bank Indonesia said credit growth remains solid, underpinned by demand and supply factors. The central bank forecasts credit growth in the range of 8% to 12% in 2026. Nevertheless, BI is committed to strengthening coordination with the government and the Financial System Stability Committee (KSSK) to improve interest rate transmission and further support bank lending.

Indonesia’s annual loan growth accelerated slightly to 9.69% year-on-year in December 2025, up from 7.74% in November, marking the fastest pace since February amid the government’s efforts to boost domestic demand. Loan growth was supported by expansion in consumption loans (6.58%), investment loans (21.06%), and working capital loans (4.52%). However, the volume of undisbursed loan facilities remained high, reaching IDR 2,439.2 trillion in December 2025, equivalent to 22.12% of the total approved credit ceiling. Looking ahead, Bank Indonesia expects full-year 2026 credit growth to come in within its 8–12% target range.