BI: BBB+ Credit Rating Reflects The World Confident The Indonesian Economy Is Stable

JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo said the decision of the rating agency Rating and Investment Information Inc (R&I) to rank BBB+ credit for Indonesia reflects the world's confidence in stable macroeconomic conditions and maintained financial system stability.

"The affirmation of R&I over Indonesia's ranking reflects strong international confidence in stable macroeconomic conditions and maintained financial system stability, as well as an increasing medium-term economic outlook, amid global uncertainty, especially in the first half of 2024," Perry said in Jakarta, quoted from Antara, Monday 30 September.

R&I affirms the Sovereign Credit Rating (SCR) of the Republic of Indonesia at the BBB+ rating, two levels above the investment grade, with a positive outlook on September 30, 2024. The Sovereign Credit Rating or the state credit rating is a measure of the government's ability to pay off its debts.

R&I believes that Indonesia's solid economic condition will continue, supported by stronger economic fundamentals, maintained external resilience, and a fiscal deficit and a low government debt ratio.

Perry said that this trust was supported by a close synergy between Bank Indonesia, the government, and the Financial Services Authority, and was supported by the credibility of well-maintained authorities.

In the future, BI will continue to monitor and monitor global and domestic economic and financial developments, take the necessary policy steps to maintain macroeconomic and financial stability, and continue to increase synergies with the government to support sustainable economic growth.

Furthermore, R&I estimates that Indonesia's economy will remain solid in the second half of 2024, with the overall growth in the year of around 5 percent, in line with Bank Indonesia's projection at 4.7-5.5 percent.

R&I also believes that price stability will be maintained, supported by BI's disciplined monetary policy and closer cooperation with the government in the Central and Regional Inflation Control Team (TPIP and TPID).

In the external resilience aspect, the current account deficit is estimated to remain low in the range of 1 percent of gross domestic product (GDP). From a fiscal perspective, the government remains strongly committed to maintaining fiscal discipline at the beginning of the new government, by keeping the fiscal deficit below 3 percent of GDP.

On July 25, 2023, R&I increased the prospects for the Republic of Indonesia to be positive from stable and emphasized Indonesia's SC ranking at BBB+ or two levels above the investment grade.