R&I Affirms Indonesia's Rating at the BBB Stable Level

Jakarta, InfoPublik - Rating and Investment Information, Inc. rating agency (R&I) affirmed Indonesia's Sovereign Credit Rating at the BBB position with the stable outlook on 26 April 2019.

"The results indicates that the policy taken consistently and synergized by Bank Indonesia, the Government and various other stakeholders are accurate which in turn managed to boost investor confidence in the resilience and prospects of Indonesia’s economy in the future," said the governor of Bank Indonesia Perry Warjiyo in Jakarta, Friday (26/4).

According to him, the affirmation was supported by several main factors. Those factors are, first, the solid growth of Indonesian economy.

Second, the decline of fiscal deficit ratio to GDP compared to the previous year, as well as Government debt ratio to GDP which remains low.

Third, economic resilience to external turmoil were managed to be maintained with the support of the Government and Bank Indonesia policies that prioritize macroeconomic stability.

Perry further stated that despite current account balance deficit in 2018, foreign exchange reserves were considered adequate to cover short-term foreign debt.

The widening of the current account deficit was not only caused by an increase in crude oil prices but also by an increase in imports of capital goods as a result of stronger investment activities that would contribute to the strengthening of economic fundamentals.

In addition, said Perry, the central government's fiscal deficit narrowed to 1.76% of GDP in 2018, which was supported by a significant increase in non-tax revenues due to the increase in crude oil prices, and relatively high growth in tax revenues which falls in line with strong domestic demand and the more efficient tax collection process.

Previously R&I has upgraded Indonesia's rating from BBB/Outlook Positif to BBB/Stable Outlook on 7 March 2018.

Reporter: Isma
Translator: SC