JAKARTA (Reuters) - An official at Indonesia’s central bank said on Thursday that companies have “far better” balance sheets this year compared with 2015, which should make banks more confident about extending loans to them.
“We see 2016 as a year of consolidation for companies, banks and the fiscal side. The consolidation in the corporate side has created far better balance sheets compared to last year,” Juda Agung, Bank Indonesia’s executive director of economic and monetary policy, said.
He said that although banks’ non-performing loan ratio stayed relatively high at 3.2 percent in October, it had gone down in nominal terms, reflecting a better trend.
Agung added that the central expects annual economic growth in the fourth quarter economic growth to remain around 5 percent. In July-September, there was 5.02 percent growth.
Reporting by Nilufar Rizki, Hidayat Setiaji and Gayatri Suroyo; Editing by Richard Borsuk