TEMPO.CO, Jakarta - Standard & Poor's (S&P) is considered to have no reason not to upgrade Indonesia's credit rating this year. Bank Mandiri (IDX: BMRI) chief economist Anton Gunawan said that Indonesia has done fiscal reforms by rescinding its fuel subsidy policy, allowing government budget to be allocated to more productive spending.
"Indonesia has shown high macroeconomic resilience, even when compared to countries with investment grade statuses," Anton said in a published research on Tuesday, April 4, 2017.
According to Anton, another reason to upgrade Indonesia's credit is the fact that Fitch and Moody's have done so. Both credit rating agencies upgraded Indonesia's investment status from BBB- to positive, allowing the country to get a BBB level grade in the next 12 months.
"But S&P is far behind them," Anton said.
S&P is expected to announce its ratings for Indonesia at the end of April or at the beginning of March. An upgrade, Anton said, will have positive impacts on credit default swap, exchange rates, bond yields, and direct investments.
But if S&P decides not to upgrade Indonesia's status, there will be little impact, he said. In June last year, S&P kept Indonesia's rating at BB+ with a positive outlook, and there were no significant impacts on financial performance indicators.
ABDUL MALIK
