Standard & Poor's Global Ratings has affirmed Indonesia's investment-grade credit rating and maintained a stable outlook, providing a measure of reassurance to investors. This stance contrasts with a trend of increasing caution from other major rating agencies regarding Southeast Asia's largest economy.
The agency upheld its stable outlook for Indonesia on Monday and confirmed the country's long-term foreign currency issuer rating at BBB. Earlier this year, both Moody's and Fitch revised their outlooks on Indonesia to negative, citing concerns over governance under the incoming Prabowo Subianto administration, though they kept the actual ratings unchanged.
In its statement, S&P indicated that the stable outlook reflects its expectation that the recent deterioration in Indonesia’s fiscal and external metrics is temporary. It also reflects the agency's view that the government's policy anchor of keeping the budget deficit under 3% of GDP will remain a key fiscal discipline.
Following this news, Indonesia's Jakarta Composite Index extended its gains, rising as much as 1.9% to reach its highest level in over two weeks.
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