Indonesia expects to receive triple-B credit rating in 2000

Indonesia expects to receive triple-B credit rating in 2000

JAKARTA (JP): Indonesia expects to receive a high-triple-B
credit rating from Salomon Brothers by the end of the decade for
its economic reform and deregulation achievements, say analysts
at the investment bank.

"Indonesia has an excellent record of economic reform and
deregulation, sustainable financial stability and a steady growth
outlook as reasons for the improving sovereign credit outlook,"
Asia-Pacific economist Andrew Freris said in a report published
by Salomon Brothers in Hong Kong on Thursday.

According to the report The Republic of Indonesia:
Consolidating its Gains, which was written by three Salomon
Brothers analysts -- Julian Liau, Peter Plaut and Andrew Freris
-- the investment bank is optimistic that Indonesia's policies
will continue to show progress.

Prudent economic policies, the integration of the private
sector, a diversification of its industrial base and an ability
to maintain political and social stability were some of the
rating considerations.

The analysts also predicted that the Gross Domestic Product in
1996 and 1997 will grow at 8 percent and 8.5 percent
respectively, conditioned primarily by export growth.

But the analysts warned of credit concerns that Indonesia will
continue to face, such as the issue of political succession, the
country's relatively high external debt burdens, maintaining non-
oil export growth, enhancing domestic competitiveness, continuing
the deregulation process, the unequal distribution of income and
meeting the country's substantial development needs.

Indonesia, the analysts noted, was last upgraded in April 1995
by Standard & Poor's from BBB- (with a positive outlook) to BBB
(with a stable outlook).

The analysts expect Moody's to continue its conservative
stance and maintain its low-triple-B rating in the near term,
citing lingering concern with the issue of political change.(13)