Minister says difficult for industries to expand this year
Jakarta (ANTARA News) - Industry minister Fahmi Idris said it would be difficult for industries in the country to expand this year in view of low credit growth.
He said here on Tuesday that the national credit growth this year was expected to reach only around 15 percent compared to 31 percent last year.
"By stating that they would only be able to allocate a 15 percent growth of credit it means that the banking sector could no longer become a partner for industrialists who wish to conduct expansion in the midst of current crisis," he said after opening a diagnostic consultancy training and education for small and medium industries.
Fahmi said with the credit growth set at only 15 percent businesses would not be able to expand as even for mere maintaining their market they would need a big capital.
"I hoped the drop in credit extension would not last for a year long," he said.
He said he hoped there would be changes on growth of bank credit allocation following new dynamics.
The minister expressed worries that the drop in the credit growth would affect business expansion and in turn increase flow of imported products into the domestic market.
He said for example if the performance of the national food and beverage industry that has so far supplied 80 percent of domestic need dropped a void of supply in the market would possibly occur to invite imported products.
"Such an industry must be maintained to safeguard the domestic market and protect it from incoming imported products.
This year he said his ministry predicted the country`s industries would only grow 3.6 to 4.6 percent.
He said the industries that were expected to remain growing positively were transport industry, transport machinery and equipment industries (at 7.7 to 8.7 percent), food, beverages and tobacco (3.0 to 4.6 percent), paper and printing products (2.0 to 3.0 percent), basic metal and steel industry (1.0 to 2.0 percent) and fertilizer, chemicals, and rubber goods (1.0 to 2.0 percent).
Other industries are expected to grow negatively such as textile, leather goods and footwear (minus 0.2 to minus 0.6 percent), wooden goods and other forestry products (minus 0.2 to minus 0.6 percent), cement and non-metal mineral products (minus 1.0 to one percent) and other goods (minus 3.0 to minus 1.0 percent). (*)
He said here on Tuesday that the national credit growth this year was expected to reach only around 15 percent compared to 31 percent last year.
"By stating that they would only be able to allocate a 15 percent growth of credit it means that the banking sector could no longer become a partner for industrialists who wish to conduct expansion in the midst of current crisis," he said after opening a diagnostic consultancy training and education for small and medium industries.
Fahmi said with the credit growth set at only 15 percent businesses would not be able to expand as even for mere maintaining their market they would need a big capital.
"I hoped the drop in credit extension would not last for a year long," he said.
He said he hoped there would be changes on growth of bank credit allocation following new dynamics.
The minister expressed worries that the drop in the credit growth would affect business expansion and in turn increase flow of imported products into the domestic market.
He said for example if the performance of the national food and beverage industry that has so far supplied 80 percent of domestic need dropped a void of supply in the market would possibly occur to invite imported products.
"Such an industry must be maintained to safeguard the domestic market and protect it from incoming imported products.
This year he said his ministry predicted the country`s industries would only grow 3.6 to 4.6 percent.
He said the industries that were expected to remain growing positively were transport industry, transport machinery and equipment industries (at 7.7 to 8.7 percent), food, beverages and tobacco (3.0 to 4.6 percent), paper and printing products (2.0 to 3.0 percent), basic metal and steel industry (1.0 to 2.0 percent) and fertilizer, chemicals, and rubber goods (1.0 to 2.0 percent).
Other industries are expected to grow negatively such as textile, leather goods and footwear (minus 0.2 to minus 0.6 percent), wooden goods and other forestry products (minus 0.2 to minus 0.6 percent), cement and non-metal mineral products (minus 1.0 to one percent) and other goods (minus 3.0 to minus 1.0 percent). (*)