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Jakarta Post

Fitch affirms RI's rating with stable outlook despite

  • Adrian Wail Akhlas

    Jakarta

Jakarta   /   Fri, August 14 2020   /  01:00 am
Shoppers select dresses at a shopping mall in Cirebon, West Java on May 20, 2020.(Antara/Nova Wahyudi)

Credit ratings agency Fitch Ratings has affirmed Indonesia’s long-term foreign currency issuer default rating at “BBB with a stable outlook”, the lower medium investment grade. Fitch cited a favorable medium-term growth outlook and low government debt-to-GDP ratio against high dependence on external financing among the reasons for retaining the rating, but also noted issues around low state revenue and lagging structural indicators. Fitch expects Indonesia’s economy to shrink 2 percent this year due to the impacts of the coronavirus pandemic, which has made a significant dent in household spending and investment. However, it forecast a rebound to 6.6 percent growth next year thanks to low-base effects and 5.5 percent growth in 2022 supported by a renewed push for public infrastructure development. “Our forecasts are subject to considerable risks, in...