Netizen Journalist

Fitch Maintains Indonesia's Debt Rating at Investment Grade

Holiday Ayo - Rating agency Fitch has again maintained Indonesia's debt rating at BBB or investment grade with a stable outlook on Tuesday (28/6) local time.

This decision takes into account Indonesia's good medium-term economic growth prospects as well as the Government's low debt-to-GDP ratio.

On the other hand, Fitch sees that there are still several challenges that need to be addressed, namely an increasing external financing ratio, low government revenues, as well as several structural indicators such as GDP-per-capita and governance, which are relatively lower than other countries. at the same level.

As cited from, Governor of Bank Indonesia, Perry Warjiyo, affirmed Indonesia's rating at BBB rating with a stable outlook. He said international stakeholders still have strong confidence in the maintenance of macroeconomic stability and Indonesia's medium-term economic prospects.

This belief is despite the still high global economic uncertainty, the increasing risk of stagflation in line with the increase in global policy interest rates in the midst of a recovering economy, as well as the increasingly widespread protectionist policies adopted by various countries.

"This is supported by high policy credibility and a strong policy mix synergy between Bank Indonesia and the Government," said Perry, Tuesday (28/6).

Going forward, continued Perry, Bank Indonesia will continue to monitor global and domestic economic and financial developments, formulate and implement the necessary steps to ensure macroeconomic stability and financial stability are maintained.

"Including further adjustments to the policy stance, as well as continuing to strengthen synergies with the Government to accelerate the process of national economic recovery," he said.

In this report released on Tuesday (28/6), Fitch assessed that Indonesia's economic recovery will continue to be supported by the improving performance of the service sector and strong exports. Indonesia's economic growth in 2022 is estimated to grow 5.6 percent and increase to 5.8 percent in 2023.

On the external side, Fitch estimates that the current account will record a low deficit of 0.4 percent of GDP in 2022 and increase to 1.0 percent of GDP in 2023.

Regarding price developments, Fitch sees the risk of increasing pressure, although he believes that inflation will still be maintained within the target range of 3 percent + 1 percent. In the medium term, economic growth is estimated to reach 5.8 percent in 2024, supported by the positive impact of the implementation of the Job Creation Law on increasing investment, as well as commitments to continue infrastructure development.

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