JAKARTA - Coordinating Minister for Economic Affairs Airlangga Hartarto asked the Nusantara Power Investment Management Agency (Danantara Indonesia) to explain the certainty of Indonesia's fiscal direction to the Moody's rating agency.
"Now everything is included in Danantara, and Danantara also plays a function for investment. This needs explanation," said Airlangga, quoted by Antara.
This step is in response to Moody's report on the importance of maintaining the predictability of policymaking, public communication, and the quality of coordination between ministries/institutions in the midst of ongoing policy and governance changes in economic management.
Airlangga said Moody's needed an explanation about the direction of Indonesia's fiscal policy since the arrival of Danantara, so that it no longer felt there was uncertainty about the direction of Indonesia's fiscal policy.
Since Danantara was formed, said Airlangga, the dividend which was originally entered into the state treasury as part of non-tax state revenues (PNBP), is now entering Danantara.
As a sovereign wealth fund (SWF), Danantara also plays a function for investment. According to Airlangga, these points are what Danantara needs to explain to Moody's.
"Because (fiscal policy) this year there will certainly be differences in the budget, especially related to investment," said Airlangga.
Furthermore, from the government's side, Airlangga conveyed a commitment to maintain a budget deficit of a maximum of three percent and a debt ratio to GDP (gross domestic product) below 40 percent.
"In macro terms, we are watching," he said.
Moody's maintained Indonesia's credit rating at Baa2 level, one notch above the investment grade limit, with an outlook adjustment from stable to negative.
In its report, Moody's conveyed the importance of maintaining the predictability of policymaking, public communication, and the quality of coordination between ministries/institutions in the midst of ongoing policy changes and economic management governance.
Moody's also highlighted the importance of strengthening the state revenue base to support priority spending and sustain higher economic growth.
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