Indef Calls for Accelerated State Spending Ahead of Ramadan

RRI.CO.ID, Jakarta - The Institute for Development of Economics and Finance (Indef) is calling on the government to accelerate state spending to stimulate credit distribution in the banking sector as the nation approaches the Ramadan and Eid al-Fitr 2026 season. 

While these religious festivities traditionally spark a surge in credit demand, experts warn that the 2026 growth rate may not be as robust as in previous years without decisive fiscal intervention.

M. Rizal Taufikurahman, Head of Indef's Macroeconomics and Finance Center, noted that while consumer demand and business activity typically spike during the holidays, banks and borrowers alike are currently exhibiting heightened caution.

"Bank credit distribution ahead of Ramadan and Eid al-Fitr 2026 is expected to still record growth, although not as strong as seasonal periods in previous years," Rizal explained on Monday, January 26, 2026, as quoted by Antara.

He attributed this "holding pattern" to banks managing risk more strictly and businesses being more calculated about adding new debt amidst a slow recovery in

To counter the slight dip in the Consumer Confidence Index (IKK), which fell to 123.5 in December 2025 from 124, Rizal suggests that the government must play a more active role in the first quarter of 2026. 

A primary focus should be Productive Assistance, which involves strengthening aid programs specifically designed to help MSMEs and labor-intensive sectors maintain their operations.

Furthermore, providing robust Fiscal Support is essential to improving liquidity by providing targeted assistance to businesses that drive national employment.

 Finally, Rizal emphasizes the need for Monetary Coordination, urging the government to work closely with Bank Indonesia to create a conducive financing environment that encourages long-term economic recovery rather than relying on temporary holiday spikes.

Despite the cautious outlook, the banking sector remains liquid. Bank Indonesia (BI) reported that total bank credit grew by 9.69 percent (yoy) in 2025, with investment credit leading the charge at a massive 21.06 percent.

Interestingly, BI revealed that there is significant room for growth, as businesses have yet to tap into IDR 2.44 quadrillion (USD 145.2 billion) in undisbursed loans, representing over 22 percent of available credit ceilings. 

The government’s challenge now is to build the economic confidence needed for businesses to finally deploy these massive funds for expansion. ***