S&P Global Ratings raised Indonesia's long-term sovereign credit rating to BBB from BBB-, with a stable outlook, citing the country's strong economic growth prospects and supportive policy dynamics.
The rating agency said the pace of Indonesia's economic growth surpassed that of its global peers, denoting government policies promoting balanced economic growth and sustainable public finances.
Despite some political disputes over the recent elections results and instances of unrest following President Joko Widodo's reelection, S&P Global Ratings does not expect the long-term economic outlook and policy environment to be materially impacted.
The rating agency said that the Indonesian government's debt burden is "relatively light," expecting government debt to remain below 30% of GDP owing to continued nominal GDP growth and a controlled fiscal deficit.
Government fiscal deficit, which declined to a multiyear low in 2018, is expected to stabilize below 2% of GDP over the next four years, Ratings said.
Ratings also anticipates a fall in Indonesia's current account deficit in the next few years, owing to steady global demand and a rebound in its terms of trade.
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