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Indonesia Economic Rating Increased, Improvement Momentum of Indonesia Economic Performance

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Finance Minister Sri Mulyani Inderawati said that Fitch’s upgrading for Indonesia, from BBB- to BBB, is a momentum to improve economic performance from various aspects.

 

Sri Mulyani Inderawati said that he felt the positive assessment would be a momentum that we will continue to use for how to improve the performance of the Indonesian economy, both in terms of growth, job creation, poverty reduction and inequality.

 

Rating agency Fitch upgraded Indonesia’s rating from BBB- or “Positive Outlook” to BBB or “Outlook Stable” on December 20, 2017. Fitch said the factors supporting the increase are the strengthening of Indonesia’s economic resilience to external factors supported by consistent macroeconomic policies to maintain stability.

 

Economic resilience has an impact on more flexible exchange rate policies, sharply increased foreign exchange reserves, monetary policy that can overcome the fluctuation of capital flows, and macro prudential policies that are able to control corporate external debt.

 

Strengthening economic resilience also led to the deepening of financial markets can improve the stability of financial markets and the establishment of macroeconomic assumptions in the credible government APBN.

 

Sri Mulyani said that we will use the healthy state budget of course for the greatest priority of national development, so we are happy with this upgrade and should be better again, so we will try.

 

Fitch also believes that improving ratings is a government synergy effort in structural reforms that can improve the investment climate, as reflected by the rise in ease of business or “Ease of Doing Business” rating.

 

This policy also encourages the strengthening of economic resilience from global pressures in line with rising foreign capital flows (FDI) that are expected to close the current account deficit in the next few years.

 

Fitch acknowledged that Indonesia’s economic growth remains strong and government debt burden remains low compared to countries with equivalent economic levels.

 

Positive assessment will certainly be a momentum that we will continue to use for how to improve the performance of the Indonesian economy, both in terms of growth, job creation, poverty reduction and inequality. Hopefully with this can improve the economic performance of various aspects.

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