Fitch revises Indonesia credit outlook to 'positive'

[JAKARTA] Fitch Ratings on Wednesday revised Indonesia's credit rating outlook to positive, meaning South-east Asia's largest economy may get an upgrade the next time the rating agency assesses it.

Indonesia is rated BBB- for its long-term foreign and local debt, Fitch's lowest level of investment grade.

The key drivers behind the outlook upgrade were a low government debt burden, favourable growth outlook and a weak but improving business environment, Fitch said in a statement.

Fitch was the first agency to give Indonesia its investment grade rating in 2011 after the country was downgraded to junk status during the Asian financial crisis.

Moody's followed in 2012, but Standard & Poor's has kept Indonesia one notch below its investment grade status.

Fitch on Wednesday praised Indonesian policymakers for its track record of stability and "a strong structural reform drive since September 2015", measures it said would support the growth outlook in the medium term.

The rating agency forecast the economy would grow 5.1 per cent this year, 5.4 per cent next year and 5.7 per cent in 2018.

That is better than the government's outlook of five per cent growth this year and 5.1 per cent next year.

Indonesia has hoped S&P would upgrade its credit rating to investment grade this year, but the agency affirmed its junk rating in June saying the country's low per capita gross domestic product and worsening corporate credit quality cast a shadow over its sovereign credit profile.

REUTERS