RI Hit by Money Drought, This is Pain for Entrepreneurs News – 18 minutes ago

Jakarta, CNBC Indonesia – Domestic entrepreneurs opened their voices regarding President Joko Widodo’s (Jokowi) statement while attending the 2023 Bank Indonesia Annual Meeting, at Grha Bhasvara Icchana, Bank Indonesia Head Office, Central Jakarta, Wednesday evening (29/11/2023). In his speech, Jokowi highlighted the news about the increasingly dry circulation of money which businessmen complained about.

It is feared that this condition will have a negative impact on the real sector. This was confirmed by employers, who feared it would trigger a domino effect and even trigger layoffs.

Apac Investama Tbk Commissioner Benny Soetrisno said that currently banking credit growth has not yet reached 2 digits. Because sources of third party funds (DPK) are also slowing down.

“Liquidity in banking drying up will certainly have an effect on the sector in that investment credit expansion will decrease or even stop. Entrepreneurs will look for a way out by seeking funding from abroad or increasing their own capital (cashed equity) to expand production and expand trade,” he said to CNBC Indonesia, Thursday (30/11/2023).

On the other hand, he added, the financial reports of almost all banks on average show very large profits.

“So far, banking is more, in other words, they are careful or prudent. So credit growth has not yet reached double digits because the source of deposits has also slowed down,” explained Benny.

“Because saving funds in the bank with a smaller return than buying SUN or SUKUK will reduce the flow of TPF in banks,” he added.

This, he said, was due to savings services between bank deposits being less competitive with state debt securities (SUN).

Benny also recommended strategies to avoid further negative effects.

“I suggest that there is a return on deposit services that can compete with SUN,” he said.

“The negative effect if funding dries up is that it causes economic growth to slow down and production activity reduces. Ultimately there could be a problem of layoffs,” he said.

“Thank God, the company I lead is still running normally according to its existing capabilities,” added Benny.

Don’t be too careful

As is known, President Jokowi at the Bank Indonesia annual meeting gave directions regarding the Indonesian economy. And revealed a series of issues related to global economic conditions.

Jokowi also highlighted complaints from business actors regarding the minimal circulation of money resulting from the purchase of financial instruments by the Ministry of Finance and Bank Indonesia.

“Earlier I said to the Governor, ‘Mr Governor, I heard from many business actors that it seems like the circulation of money is drying up among the actors. Maybe too much is being used to buy SBN or too much is being used to buy SRBI or SVBI. “so that there will be less entry into the real sector,” said Jokowi.

“And also from the fiscal perspective, we also check the realization of regional government spending, the realization of regional government spending, even though there are only 3 weeks left, is still at 64%. The central government is also still at 76%,” he continued.

President Joko Widodo at the 2023 Bank Indonesia Annual Meeting. (Bank Indonesia Youtube Screenshot)Photo: President Joko Widodo at the 2023 Bank Indonesia Annual Meeting. (Bank Indonesia Youtube Screenshot)
President Joko Widodo at the 2023 Bank Indonesia Annual Meeting. (Bank Indonesia Youtube Screenshot)

“I always follow things like this almost every day and I call the Governor, but I don’t call the Governor later to intervene. I will definitely call the Minister of Finance, what is the actual condition like,” said Jokowi.

He also reminded that even though you have to be careful, you still have to be ready for a scenario that quickly responds to changes in the future.

“We have to be optimistic, but we have to remain alert, we still have to be careful, alert to super fast changes, super fast changes in technological disruption, indeed we have to be prudent in our steps but also don’t be too careful, credit is too careful, everyone is too careful “As a result, circulation (of money) in the real sector has dried up,” stressed Jokowi.

[Gambas:Video CNBC]

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