Indonesia's Debt Rating Is Stable, Ministry Of Finance: Domestic Economy Improves

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JAKARTA The S&P rating agency again maintains Indonesia's credit rating (debt) at the OUTlook BBB position is stable.

For this, the Ministry of Finance (Kemenkeu) stated that Indonesia succeeded in achieving fast fiscal consolidation, supported by solid revenue growth and well-calibrated policies, as well as stable economic growth and external conditions after the recovery of this country from the pandemic.

"S&P sees significant improvements in Indonesia's fiscal conditions. This is driven by several positive factors, including the increase in profitable commodity prices, improving domestic economic conditions, and a strong commitment to the implementation of sustainable fiscal policies. Improvements in fiscal deficits also have a positive impact on the Government's debt ratio to Gross Domestic Product (GDP), showing the credibility and stability of Indonesia's economy," said the Director General of Financing and Risk Management of the Ministry of Finance Suminto, reported by the official website Friday, July 7.

According to him, Indonesia's real GDP growth has also been at the highest level in recent years, reaching 5.3 percent in 2022. Suminto said this score was the result of an increase in foreign demand for key commodities and efforts to develop the domestic economy.

"The Indonesian government has managed to control the fiscal deficit below 3 percent of GDP. This decrease in fiscal deficit has a positive impact on reducing the burden on government debt and interest payments," he said.

Suminto added, on the way to increase Indonesia's ranking, there are still challenges, such as the limited basis of state revenue.

"However, we believe that with the improvement of fiscal policies and sustainable structural reforms, the revenue base can be increased so that it can boost Indonesia's credit rating in the future," he said.

Sri Mulyani's subordinate also conveyed that in the face of the upcoming general elections in February 2024, the political and policy situation in Indonesia remained stable, showing maturity in democracy and the government's commitment to national stability.

"The government will remain alert to global risks and maintain prudent and sustainable fiscal policies. In addition, it also continues to be committed to protecting people's purchasing power, controlling inflation, and maintaining the momentum of economic recovery," he concluded.