R&I Maintains Indonesia's Credit Rating, Si Mulyani Believes The Economic Fundamentals Are Strong

Minister of Finance, Sri Mulyani Indrawati. (Photo: Instagram @smindrawati)

Minister of Finance Sri Mulyani Indrawati believes that the decision of the rating and Investment Information agency, Inc. (R&I) to maintain Indonesia's Sovereign Credit Rating at BBB + with a positive outlook indicates the strong fundamentals of the Indonesian economy.

"The results given by R&I show that Indonesia's economic fundamentals are strong," said Sri Mulyani, quoted from Antara, Friday, October 4.

The strong funding is supported by an increase in per capita income, demographics and abundant natural resources, the manufacturing sector that continues to grow, as well as prudent fiscal policy management with relatively controlled government debt burdens.

In addition, R&I assesses that the Indonesian economy in 2023 will be able to grow solidly above 5 percent to continue its performance since 2022. Meanwhile, in 2024, growth will still strengthen in the first half and it is estimated that it will remain in the range of 5 percent by the end of the year.

The government projects the growth of Indonesia's real GDP in the range of 5.0-5.2 percent in 2024 with a joint synergy with Bank Indonesia (BI) to maintain price stability and inflation levels.

"The positive assessment of R&I shows that the Indonesian government is always committed to accelerating an inclusive and sustainable economic transformation," added the Minister of Finance.

The R&I institution also appreciates the government's efforts to keep the fiscal deficit below 3 percent amid fluctuations in oil prices and exchange rates that affect subsidized spending.

R&I noted that Indonesia's revenue base can still be optimized to increase fiscal capacity. According to R&I, Indonesia's upcoming rating increase can also occur if the new government can carry out priority programs by taking into account fiscal resilience and macroeconomic stability.

In line with R&I, the Minister of Finance expressed optimism about the increase in Indonesia's ranking next year.

"We are optimistic that R&I will provide an increase in ranking next year, by looking at good fiscal and macroeconomic conditions, as well as the commitment of the next government in creating high and stable economic growth," he said.