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2025.08.2007:28:41UTC+00Indonesia Loan Growth Weakest in Near 3-1/2 Years

In July 2025, Indonesia experienced a slight decrease in its annual loan growth rate, which slowed to 7.03% compared to 7.77% in June. This marks the slowest growth observed since March 2022. The deceleration can be attributed to reduced purchasing power, a shrinking middle class, and heightened caution among banks regarding credit extension. Year-on-year growth for third-party funds increased by 7%, leading banks to divert more resources into securities and stricter credit distribution standards. Across all major loan categories, growth moderated: consumption loans increased by 8.11%, down from June's 8.49%; investment loan growth slowed to 12.42% from 12.53%; and working capital loan growth dipped slightly to 3.08% from 4.45%. Despite these trends, Bank Indonesia maintains its overall lending growth forecast within the 8% to 11% range for 2025.

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