Wednesday, August 2, 2017

June M2 Growth Picks Up, Loan Growth Moderates

Economic Research
1 August 2017

Economic Update

Indonesia’s money supply (M2) growth edged up to 11.4% YoY in June (May: +11.1%) due to a pick-up in net domestic claims. Going forward, we expect broad money supply to grow at a faster pace of 11% in 2017 (2016: +10%), underpinned by stronger economic growth.

Private credit moderated. Total loan growth, however, eased in June, due to weaker growth in working capital and investment loans. Going forward, we expect demand for private credit to pick up to 10-12% in 2017 (2016: +7.8%), aided by:
    i.   A more accommodative policy environment following monetary policy easing in 2016;
   ii.   Stronger projected economic growth.

Economist:  Rizki Fajar| +6221 2970 7065

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