MACROECONOMICS – JAKARTA. The Japan Credit Rating Agency, Ltd. (JCR) has maintained Indonesia's Sovereign Credit Rating at BBB+ (Investment Grade) with a stable outlook as of March 22, 2024.
This decision takes into account the strong economic growth prospects and controlled government debt. JCR projects that government debt will gradually decrease, in line with improving economic growth and fiscal deficit.
Bank Indonesia Governor, Perry Warjiyo said, this proves that amidst the current global uncertainty, the international community has strong confidence in the maintenance of Indonesia's macroeconomic stability and financial system.
“This is supported by policy credibility and strong policy mix synergy between Bank Indonesia and the government,” he said in an official statement, Monday (25/3).
Read Also: Fitch Ratings Warns of Rising Medium-Term Fiscal Risks for Indonesia
Perry said, going forward, his party will continue to monitor global and domestic economic and financial developments, formulate and implement necessary measures to ensure macroeconomic stability and the financial system remain intact.
“Including further adjustments to policy stance if necessary, and continue to strengthen synergy with the government to accelerate national economic recovery,” Perry said.
JCR assesses, Indonesia's economy remains strong where economic growth is estimated to reach 5% in 2024, supported by private consumption and investment.
In addition, the Job Creation Law is considered capable of increasing foreign investment such as for infrastructure development and the Nusantara Capital City (IKN).
JCR views, the credibility of fiscal policy is maintained reflected in the fiscal deficit which is below 3% of GDP in 2022, supported by the implementation of tax reforms and government spending reallocation.
Then, in 2023 the fiscal deficit dropped to 1.66% and is maintained below 3% in 2024.
From an external perspective, JCR views Indonesia's economic resilience against external turmoil remains intact supported by a level of foreign exchange reserves equivalent to 6.5 months of imports.
Previously, JCR also maintained Indonesia's creditworthiness rating at the same level or two levels above the lowest investment grade level on July 27, 2022.
