TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Darmin Nasution, said that Indonesians prefer to purchase land rather than saving money in banks. Such condition, according to Darmin, is one of the main contributors of low third-party funds (DPK) in the form of deposits or savings ratio to the country's Gross Domestic Product (GDP).
Another contributing factor is the public's consumptive behaviour. "Actually, the most influential factor towards saving other than consumption is land speculation. Our people love to have their savings in [the form of] lands," Darmin said on Tuesday, December 6, 2016.
Darmin said that such public behaviour is not particularly good because it will continue to increase land prices. Darmin also concerned about the low number of people that prefer to save their money in banks.
Based on the data provided by the Financial Services Authority (OJK), Indonesia's GDP to savings ratio is still relatively low at 34.8 percent in 2015. Whereas Singapore has a GDP to savings ratio of 49 percent, while the Philippines has a GDP to savings ratio of 46 percent.
In response to the condition, President Joko "Jokowi" Widodo hoped that the country's GDP to savings ratio can increase up to 75 percent.
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