INDONESIA: Rating and Investment Information, Inc. Affirmed Indonesia’s Sovereign Credit Rating at Investment Grade

Thursday May 12 2016

Rating and Investment Information, Inc. (R&I) has affirmed Indonesia’s Sovereign Credit Rating at investment grade level.

In its press release, R&I affirmed Sovereign Credit Rating of the Republic of Indonesia at BBB- /stable outlook. The key factors that support affirmative decision for Indonesia`s sovereign credit rating are Indonesia’s solid economic growth underpinned by strong domestic consumption, restrained budget deficit and public debt at healthy level, relatively sound banking sector balance sheets, and ascertain resilience to external shocks.

R&I stated that the slowdown in the domestic economy throughout 2015 was due to the uncertainty in the global economic and financial environment. However, R&I sees that the economy in 2016 will be driven by government spending as the driving force of the economy as well as increased household consumption as a result of central bank monetary policy easing. R&I positively views the government’s moves toward structural reform which has just begun in earnest, including the subsidy system reform. This subsidy reform widened the budgetary space for expenditures relating to infrastructure and other areas that can enhance productivity and support higher economic growth.

R&I had previously affirmed the Sovereign Credit Rating Indonesia at BBB- / stable outlook on March 18th, 2015.

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