Banking Sector Perception Survey Shows Mixed Outlook on Economic Conditions
The Financial Services Authority’s (OJK) Banking Sector Orientation Survey (SBPO) indicates that banking sector performance remains solid, yet expectations among bankers regarding macroeconomic conditions have deteriorated into pessimistic territory.
Banking performance remains robust as reflected in the Banking Business Orientation Index (IBP), which stood at 56 in Q1 2026, signalling an optimistic level. However, banking projections as measured by the Macroeconomic Conditions Expectation Index (IKM) plummeted into pessimistic territory at 45.
The decline is driven by predictions of currency weakness and rising inflation. “Confidence in rising inflation rates is driven by seasonal factors such as Ramadan, Eid al-Fitr celebrations and Lunar New Year festivities, which increase the rise in prices of goods and services,” according to the OJK SBPO official release issued on Monday, 9 March 2026.
The OJK noted that the decline is also influenced by low base effects from the previous year, as electricity tariff discounts were applied last year but are not being reinstated in Q1 2026. Meanwhile, the exchange rate is expected to weaken amid persistently high global geopolitical tensions.
Despite these concerns, Indonesia’s economic growth is projected to accelerate, driven by anticipated increases in consumer spending in the first quarter of 2026. The OJK survey also showed that the majority of respondents remain confident that banking sector risks in the first quarter can be managed and controlled.
This is evidenced by the Risk Perception Index (IPR) of 57, which remains in optimistic territory, reflecting confidence that credit quality will remain sound. The Net Foreign Exchange Position (PDN) remains at low levels with foreign currency assets and claims exceeding foreign currency liabilities (long position).
Liquidity risk is also expected to remain under control, driven by expectations that banking liquidity instruments and third-party funds (DPK) will continue to grow. As projected DPK growth is expected to exceed projected credit distribution growth, net cash flow in Q1 2026 is projected to increase. This projected increase is also consistent with local government funds beginning to flow in Q1 2026.
Banking performance expectations for Q1 2026 remain at optimistic levels with the Performance Expectations Index (IEK) at 67. The OJK conducts the SBPO quarterly to obtain insights from the banking industry regarding the direction of the economy, perceptions of banking risks, and banking business trends in the coming quarter.
The survey was conducted in January 2026 involving 93 responding banks, whose combined assets represent 94.17 per cent of total assets of universal banks based on data from December 2025.