Macroeconomic Indicators and Non-performing Loans and Banking Profitability Effect For Gross Domestic Product (Case Study Indonesia Economic and Banking)
DOI:
https://doi.org/10.30872/jatri.v2i2.1499Keywords:
gross domestic product, inflation, interest rates, non-perorming loans, profitabilityAbstract
The purpose of this study is to analyze the effect of inflation, Bank Indonesia interest rates (BI-rate), non-performing loans (NPL), profitability (profits) on gross domestic product in Indonesia in 2012-2021. Multiple linear regression model is used as the analysis model and secondary data from the Central Statistics Agency (BPS) and the Financial Services Authority (OJK) are collected for this study. The results suggest that: (1) a negative coefficient of inflation implies that an increase in inflation will lead to a decrease in GDP at current prices, based on the probability of the significance of inflation on GDP at current prices; (2) a positive coefficient of interest rates implies that an increase in interest rates will lead to an increase in GDP at current prices, based on the probability of the insignificance of interest rates on GDP at current prices; (3) a positive coefficient of NPLs implies that an increase in NPLs will lead to an increase in GDP at current prices, based on the probability of the significance of NPLs on GDP at current prices; (4) a positive coefficient of profitability implies that an increase in profitability will lead to an increase in GDP at current prices, based on the probability of the significance of profitability on GDP at current prices. Overall, inflation, interest rates, NPLs, and profitability have a significant impact on GDP at current prices.
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