S&P gives country positive rating

The Jakarta Post, Jakarta

Global rating agency Standard and Poor's (S&P) sees "positive bias" in the sovereign rating of Indonesia, along with four other Asia-Pacific countries.

The four others with positive rating outlooks are China, Thailand, Pakistan and the Cook Islands, the agency said in its latest report issued on Thursday.

The Asia-Pacific Report Card, August 2004 also provides updates on credit developments in each of the 18 rated sovereigns in the region.

S&P revised its rating on Indonesia from stable to positive a few months ago.

Indonesia's presidential election, which proved swift, peaceful and orderly, has contributed in part to the agency's confidence on the country's economic prospects.

Standard & Poor's credit analyst Ping Chew noted that the electoral process this year in emerging Asia had, for the most part, proceeded remarkably smoothly.

"At the beginning of the year, we feared that the elections in a number of Asia's democracies would give raise to civil disturbances that might derail consolidation of economic and fiscal conditions.

"So far, however, the democratic process has been orderly, such as in Indonesia, even if there have been some surprising or contentious outcomes, such as in India and Taiwan," Chew said in the statement.

Economic recovery, which began in mid-2003, has continued into 2004, with revival in domestic demand occurring across most of the Asia Pacific, led by China.

Challenges remain, however, with soaring oil prices being the greatest threat, the statement said.

"A worsening security situation in the Middle East could sustain high oil prices, affecting trade, cost and inflation in the Asia Pacific," Chew said.

"Growth could decelerate, but is unlikely to be derailed."