Jakarta – The amount of bank credits extended in 2004 will not exceed credits disbursements by banks in Indonesia in 2003, analysts have predicted.
There will be brisk credit expansion in the first four months of this year but a slump will prevail in the rest of the year because the business sector and banks will tend to restrain themselves amid political activities, banking analyst Ryan Liryanto said yesterday.
The country will hold parliamentary elections in April to be followed with the presidential election in July, discouraging investment.
Ryan said bank credits are expected to boost the real sector but will depend greatly on the implementation of the general elections.
Data at the central bank showed that credits disbursed totaled Rp55.9 trillion in the first 11 months of 2003, or 61.8 per cent of the whole year's target of Rp90.5 trillion.
The loan to deposit ratio of Indonesian banks is less than 50 per cent.