Loan Growth Slows In 2014 Will

Loan Growth Slows In 2014 Will

Managing Director & CEO Senior Country Officer - JP Indonesian Morgan , Carlos T. Budiman said Indonesia's economic fundamentals remain strong .

'' This country is facing challenges due to structural problems in the economy ( the current account deficit , a negative balance of payments , balance of trade continuing , "Unhealthy " financial burden due to energy subsidies , etc. ) which resulted in a significant weakening of the currency, '' said Haryanto T. Budiman in Jakarta, Thursday ( 12/12 ) .

Moreover , according to him , a number of fundamental issues widely known ( focused on domestic manufacturing strategy , lack of infrastructure , lack of talent in the high growth sector , radicalism in the labor movement , the ever-changing regulations , a weak legal system , and corruption ) also prevent investment of coming to Indonesia in a big way to compensate for the current account deficit that we face .

According to him , the state challenges to the global economic recovery is not yet stable . Therefore , economic growth in 2014 is estimated to be much lower in lieu of a number of tightening measures introduced by the Bank of Indonesia.
Any slowdown in the economy , he added , will have a direct and indirect impact on the country's banking system .

While the overall banking system in Indonesia is congested due to the increase in postal banking supervision as a result of the crisis in 1998 and 2008 , the risk of " shock " to the banking system can not be ignored because of the tight liquidity in the market with 120 banks .

Risking the process by limiting the activities of banks by capital will take an additional 3 years ( late June 2016 ) to complete , therefore, will not " protect " the bank of any potential " shock " to the system in 2014 .

Therefore , he said , banks have to prepare much more challenging conditions in 2014 , as competition for deposits was expected to increase credit growth will slow - is projected to grow only 15-17 %
in 2014 .

'' A significant reduction of 22-23 % growth in the previous years . Asset quality in certain segments and industries can also deteriorate '' .

According to Haryanto T. Budiman , all stakeholders ( Government , Bank Indonesia , FSA , LPS , politicians ) should work together to ensure that the negative impact on our economy and the banking sector will be minimized .

According to him , the transfer of banking regulation and supervision of Bank Indonesia to the FSA , the smooth transition of these steps is very important . .