Indonesia central bank expects slower loan growth this year, pick-up in 2015

[JAKARTA] Indonesia is expected to have its slowest loan growth since 2010 this year due tight liquidity at banks, a central bank senior official told Reuters on Friday.

Juda Agung, the executive director of Bank Indonesia's economic and monetary policy department, estimated 2014 loan growth at 11-12 per cent, or just over half of last year's pace of 21.4 per cent.

Earlier, monetary authorities believed that this year's loan growth would be close to 15 per cent.

Agung said loan growth should pick up next year to 15-17 per cent because of better economic conditions.

In September, bank loans were 13.2 per cent higher than a year earlier, according to data from Financial Services Authority.

Agung also forecast that Indonesia's full-year current account deficit will narrow to 2.9 per cent of gross domestic product (GDP) from 3.3 per cent of GDP in 2013.

The fourth quarter's current account gap is predicted to be 2.3 per cent of GDP, Agung added, compared with 3.07 per cent in the third quarter.

REUTERS