Annual loan growth in Indonesia slowed to 7.77% in June 2025, down from 8.43% in May, marking the weakest pace since March 2022. The deceleration reflects weakening purchasing power and a contracting middle class, coupled with banks' growing caution in extending credit. Loan growth moderated across all major categories. Consumption loans rose by 8.49%, down from 8.82% in the previous month. Investment loan growth dropped to 12.53% from 13.74% in May, while working capital loan growth eased slightly to 4.45% from 4.94%. Sector-wise, credit growth was primarily supported by the industrial and social services sectors. Despite the slowdown, Bank Indonesia continues to project overall lending growth within the 8% to 11% range for 2025.