JAKARTA - The S&P Global Ratings (S&P) rating has confirmed the debt rating (Sovereign Credit Rating) of the Republic of Indonesia at the level of BBB (one level above the lowest level of investment grade) with a stable outlook.
Previously, S&P maintained Indonesia's Sovereign Credit Rating at BBB with a stable outlook on July 30, 2024.
In addition, this affirmation is supported by a strong growth outlook, a healthy fiscal policy framework, and a relatively low burden on foreign and government debt.
Meanwhile, the stable outlook reflects the S&P's view that the Government remains committed to maintaining a fiscal deficit below 3 percent to maintain fiscal sustainability.
Furthermore, the ongoing development of commodity-based industries (hilirization) is expected to maintain external stability in the future.
Bank Indonesia Governor Perry Warjiyo said the S&P affirmation decision on Indonesia's sovereign credit rating at the BBB level with a stable outlook reflects the strong trust of international stakeholders in Indonesia's macroeconomic stability and the prospect of economic growth remains strong.
"This belief is supported by a careful policy framework, and the effective policy mix synergy between the Government and Bank Indonesia amid ongoing global uncertainty," he said in his statement, Wednesday, July 31.
In the future, he said that Indonesia's increase in Indonesia's sovereign credit rating would be determined by an increase in the capacity of foreign debt payments, among others, supported by an increase in foreign income or a decrease in dependence on external financing.
On the other hand, Perry said that Indonesia's ranking could be lowered if the increase in the ratio of government debt to GDP was above 3 percent in a persistent manner, the ratio of interest payments for government debt to state revenues exceeded 15 percent, or there was a weakening of structural and prolonged export revenues.
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"Bank Indonesia continues to be committed to strengthening the effectiveness of monetary policy in order to maintain the stability of the Rupiah exchange rate and ensure that inflation is controlled in the target range, while still supporting efforts to encourage economic growth," he said.
Perry said that in the future, Bank Indonesia will also continue to strengthen policy synergies with the Government to maintain stability and encourage economic growth.
"Bank Indonesia will also strengthen policy synergies with the Financial System Stability Committee (KSSK) to maintain financial system stability," he concluded.
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