BI Sets Optimal Credit Growth Range for 2026

Balancing Financial Stability and Economic Growth

Bank Indonesia (BI) has determined that a credit growth rate between 8% and 12% is optimal for 2026 to maintain financial system stability while supporting economic recovery. According to Solikin M. Juhro, Assistant Governor of BI, this target range represents a careful balance between banking intermediation functions and stability risks.

Rationale Behind the Optimal Range

The 8-12% credit growth target is designed to ensure both financial system stability and economic growth. Growth below this range might indicate insufficient banking intermediation to support economic activity, potentially constraining recovery. Conversely, growth above 12% could lead to excessive credit expansion, potentially weakening banking resilience through deteriorating credit quality.

Key Considerations for Financial Stability

The determination of this optimal range considers multiple factors including credit quality, capital adequacy, and financial inclusivity. BI emphasizes that maintaining this balance is crucial for ensuring that credit growth supports sustainable economic development without compromising financial stability. The central bank continues to monitor these factors closely to adjust policies as necessary.