S&P raises RI's rating<\/p>\n
JAKARTA (JP): Standard & Poor's, one of the world's
\ninfluential rating agencies, has raised its long-term foreign
\ncurrency rating of Indonesia to triple B (BBB) from triple B
\nminus (BBB-).<\/p>\n
The agency said yesterday that the upgrade reflects
\nIndonesia's record of prudent financial management and
\nmacroeconomic reforms, which have strengthened government
\nfinances and diversified the country's crude oil-dependent
\neconomy.<\/p>\n
The agency's triple B rating implies entities which have an
\nadequate capacity to pay interest and repay principals in a
\ntimely manner.<\/p>\n
In a statement made available to The Jakarta Post yesterday,
\nthe agency said that further appreciation of the Japanese yen
\nwill boost the U.S. dollar value of the country's foreign debts
\nthis year.<\/p>\n
\"But the debt burden should continue to decline in the long
\nterm due to strong export growth and moderate current account
\ndeficits,\" the statement added.<\/p>\n
These favorable factors will, however, be tempered by
\nchallenges arising from the country's substantial development
\nneeds and the transition in political leadership once President
\nSoeharto leaves office.<\/p>\n
Far-reaching financial reforms have broadened Indonesia's tax
\nbase, halving the share of energy revenues since 1988 and
\nreducing the budget deficit from 1.5-3.5 percent of the gross
\ndomestic product (GDP) in 1990 to a currently negligible level.<\/p>\n
Standard & Poor's said that recent progress in rehabilitating
\nstate banks and the gradual privatization of a number of state
\nenterprises should also help keep government finances balanced
\nand further reduce the burden of public sector debts, estimated
\nat 44 percent of GDP in 1995.<\/p>\n
At the same time, according to the agency, high rates of
\nsavings and investment -- more than a third of GDP in 1995 --
\nwill likely sustain healthy rates of economic growth, which
\nshould help to narrow still sizable disparities in wealth and
\nincome.<\/p>\n
Soeharto is widely expected to be re-elected in 1998 but
\npolitical stability and investor confidence will be tested by his
\neventual departure from office, said the agency. The continuity
\nprovided by a technocratic leadership committed to economic
\nreform, it added, should support a relatively smooth political
\ntransition when it comes.(hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sp-raises-ris-rating-1447893297",
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"sponsor": "Okusi Associates",
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