Executive Summary

Key insights and market outlook

Bank Indonesia (BI) has set a conservative credit growth target of 8-12% for 2026, slightly higher than this year's revised target of 8-11% ¹

². The central bank projects 5.33% economic growth for 2026, below the government's target of 5.4% ³. BI Governor Perry Warjiyo cited global economic uncertainty and domestic monetary policy support as key factors influencing these projections ³⁴.

Full Analysis

02

Deep Dive Analysis

BI Maintains Conservative Credit Growth Target for 2026

Economic Projections Amid Global Uncertainty

Bank Indonesia has set a credit growth target of 8-12% for 2026, representing a conservative outlook compared to this year's revised target of 8-11% ¹

². This projection comes as the central bank forecasts 5.33% economic growth for 2026, slightly below the government's target of 5.4% ³. The economic growth projection takes into account both global economic conditions and domestic monetary policy support ³.

Monetary Policy and Credit Growth Drivers

BI Governor Perry Warjiyo explained that the economic projection considers both global economic slowdown and domestic policy measures ³

⁴. The central bank has implemented multiple interest rate cuts this year and expanded liquidity measures to support economic growth ¹. Chief Economist of Bank Permata, Josua Pardede, noted that the credit growth target is realistic given current liquidity conditions and maintained credit quality ¹.

Sectoral Growth Prospects

The banking sector is expected to see credit growth particularly in priority sectors that receive liquidity incentives, including agriculture, trade, manufacturing, housing, real estate, construction, transportation, logistics, tourism, creative economy, and MSMEs ¹

. The growth is anticipated to be supported by continued monetary easing and macroprudential liquidity incentives ¹².

Challenges in Monetary Transmission

Despite favorable liquidity conditions, with liquidity ratios at 29.30% and LCR at 205.94%, the transmission of interest rates remains a challenge ¹

. As of September 2025, deposit rates have dropped by only 32 basis points, while lending rates have decreased by just 16 basis points, despite significant policy rate cuts ¹.

References