Standard and Poors (S&P), the globally renown rating agency, has signaled a raise in Indonesian debt rating to investment grade. On May 11th, 2016, an S&P delegation meet with Indonesia’s Coordinating Minister for Economy Darmin Nasution to evaluate the country’s performance. After the meeting, Kyran Curry, Director of Sovereign and International Public Finance Ratings of S&P Global Ratings, stated that the rating might be improved as the Indonesian economy gives some positive prospects. However, the agency is still studying that possibility and has so far not made any official statement.
During their visit to Indonesia last week, the S&P delegation learned about the country’s economic condition from relevant Indonesian officials. According to Finance Minister Bambang Brodjonegoro the delegation noted the improvements the country saw in various sectors such as in the management of the country’s economy and state finance in relations between the center and the regions. Bambang also pointed out the government’s successful efforts to improve the business climate by deregulating licensing procedures and other processes to attract investment.
Curry said that the final S&P decisions on Indonesia’s rating will be made official in the next weeks. So far, S&P is the only international rating agency that not yet has announced their rating grade for the country. Fitch Ratings and Moodys already gave their respective rating of investment grade for Indonesia by the end of 2011 and early 2012. If S&P should decide to elevate the country’s rating to investment rate, investors would no longer doubt doing business in Indonesia and an increase in investment flow to the country could be expected.