RI gets B rating, with stable outlook

The Jakarta Post, Jakarta

Indonesia's economic performance has been improving since the 1997 Asian financial crisis, a fact that has prompted London- based international ratings agency Fitch to upgrade the country's ratings.

The long-term foreign currency rating has been upgraded from B- to B, while at the same time, the short-term foreign currency rating has also been affirmed at B, Fitch said in a statement issued on Tuesday.

In June 1997, Fitch assigned an overall rating of BBB- to Indonesia.

According to the ratings agency, market confidence in Indonesia has significantly improved during the past year, following the change of the country's leadership from Abdurrahman Wahid to President Megawati Soekarnoputri in July 2001.

Megawati, who won popular support, has been the main factor behind the more stable political and economic landscape.

The rescheduling of some US$5.4 billion in debt from the Paris Club of creditor nations had boosted confidence among investors that the country's foreign debt will be manageable to 2009.

Fitch said that fiscal sustainability and public debt management remained a cause for concern, but they were less alarming than they appeared 12 months ago.

State budget outcomes for 2001 were better than expected, as Indonesia managed to limit the deficit to 2.4 percent of GDP, well below the budgeted 3.7 percent.