TEMPO.CO, Jakarta - Indonesia's non-performing loan (NPL) ratio has been predicted to drop by the end of this year as indicated by, among others, a decrease in reserve funds for losses due to NPLs.
"The banking [industry] has started to see that NPL-related losses have decreased," Bank Permata economist Josua Pardede told Tempo on Sunday, October 16, 2016.
However, Josua explained that the impact of the decreasing NPL ratio would not be apparent in the near future, since the economic drivers have no yet significant.
The Financial Services Authority reported that the NPL ratio in August climbed by 3.22 percent when compared to that in July at 3.18 percent. Such a condition was related to a declining loan growth from 7.74 percent in July 20 6.83 percent in August.
Eny Sri Hartati, researcher with the Institute for Development of Economics and Finance (Indef) said that the NPL ratio went down as the economic growth in the second quarter of this year improved.
"The economic growth of 5.18 percent has suppressed the NPL [ratio]," Eny said.
However, Eny warned that the NPL ratio could jump if there was no improvement to be realized in the real sector. In addition, should the household consumption growth be limited, demands on loan would decline
Kenta Institute economist Eric Sugandi predicted that the NPL ratio would be stable at around 3 percent. Sugandi added that banks would remain cautious in distributing loans, particularly to high-risk sectors, such as mining. Eric also predicted that loans would grow by seven percent.
GHOIDA RAHMAH | FAIZ NASHRILLAH
