RI Debt Rating Is Stable, Ministry Of Finance: The Prospect Of Solid Growth

Illustration (Photo: Doc. Ministry of Finance)

The Ministry of Finance (Kemenkeu) responded to a recent Fitch Ratings report announcing the affirmation of Indonesia's credit rating BB with a Stable Outlook. Director General of Financing and Risk Management of the Ministry of Finance Suminto said this affirmation was supported by stable economic performance and solid growth prospects.

"Credible fiscal policy and careful debt management encourage Indonesia's strong and stable economic performance with a solid growth outlook," he said as reported by the official website today, Wednesday, September 6.

Suminto explained that strong domestic consumption is the main driver of economic growth this year, even in the midst of global economic turmoil.

"Indonesia's economic growth has reached 5 percent over the last seven quarters," he said.

Sri Mulyani's subordinate said that in terms of fiscal Fitch appreciated the fiscal deficit which had returned to its pre-pandemic level in 2022 which showed the commitment of the Indonesian government to maintain fiscal balance.

"The measurable fiscal policy is expected to maintain the deficit and debt at a well-managed level," he said.

In addition, continued Suminto, Fitch also expects the government to increase revenue even though it is faced with the challenge of decreasing commodity prices.

Furthermore, Suminto said that in the midst of changing the situation in Indonesia's negative current account balance in the second quarter of 2023 by 0.6 percent, Fitch projected that the deficit would increase to 0.9 percent in 2024 and 1.5 percent in 2025.

"Fitch sees the potential for a gradual increase in foreign direct investment, especially in the electric and manufacturing vehicle sectors, which can reduce the vulnerability of the balance of payments and support a decrease in the current account balance deficit," he added.

Then, Fitch looks well at the decrease in dependence on debt in foreign currencies. This has reduced the risk of exchange rate fluctuations because foreign investors who are increasingly interested in Indonesian government bonds have increased the stability of state finances.

Meanwhile, Indonesia's projected economic growth will remain strong at the level of 5.2 percent in 2024 and 5 percent in 2025.

"In the midst of global dynamic challenges, the government will continue to ensure that economic recovery is maintained through the solid role of the APBN, accelerating structural reforms, and strong synergy between institutions to achieve strong, inclusive, and sustainable economic growth," concluded Suminto.