Yogyakarta. Government deposits held at commercial banks in the Special Region of Yogyakarta (DIY) rose sharply over the past three years, prompting the Indonesia Deposit Insurance Corporation (LPS) to urge that public budgets be moved into active spending to stimulate the local economy.
LPS reported that deposits from government account groups (DPK — dana pihak ketiga) recorded a year-on-three-year jump of 34.22% as of October 2025, reversing a contraction of -3.34% recorded in the same period in 2022. The regulator called attention to the larger share of government balances parked in banks and recommended transferring funds to operational spending accounts to help revive circulation in the economy.
Although government deposit share increased only modestly in percentage terms — from 7.54% (Rp 5.76 trillion) in October 2022 to 7.66% (Rp 6.71 trillion) in October 2025 — LPS stressed that even this reallocation of liquidity could have meaningful effects if those resources are spent in the final months of 2025. The agency clarified it is not asking for wasteful expenditures but for prudent shifts to operational accounts so the funds can spur activity.
On the broader banking picture in DIY, total third-party funds (DPK) rose 4.95% by October 2025. Product-level trends show business activity expanding: current accounts (giro) grew 11.35%, time deposits (deposits) rose 6.20%, while savings expanded only 0.71% — a sign that retail saving momentum has slowed.
Compositionally, savings remain the dominant component of household and retail deposits, accounting for 59.21% (Rp 51.85 trillion) of DPK, followed by time deposits 26.79% (Rp 23.46 trillion) and current accounts 14% (Rp 12.26 trillion). LPS also noted a shift in deposit tiers: balances in the Rp 500 million–Rp 2 billion bracket and those above Rp 5 billion have increased, while deposits under Rp 100 million — though slightly down — still form the largest single group.
To improve financial literacy and encourage healthier saving and spending patterns, LPS — together with the Financial Services Authority (OJK), Bank Indonesia and academic partners — said it will scale up outreach programs. Among planned activities is a Financial Festival slated for 2026 in Yogyakarta and Makassar, aimed at promoting basic financial education and banking inclusion.
Why it matters: A build-up of government funds in bank accounts can temporarily dampen money circulation. If redirected appropriately into operational spending, those funds may support local demand and business activity, helping sustain economic momentum at a regional level.
Comments