​No. 26/58/DKom

Japan Credit Rating Agency, Ltd. (JCR) has affirmed Indonesia's Sovereign Credit Rating at BBB+ (investment grade) with a stable outlook, as announced today, March 22, 2024. According to JCR, key factors that support the decision are Indonesia's solid domestic demand-led growth potential and restrained public debt. JCR expected the debt will gradually decrease as the fiscal balance improves mainly supported by solid economic growth and improved fiscal deficit.

In response to the decision, Governor of Bank Indonesia, Perry Warjiyo, stated that JCR's affirmation of Indonesia's rating at BBB+/stable outlook shows a strong international stakeholders confidence in Indonesia's maintained macroeconomic and financial system stability, including medium-term economic prospects, amidst global economic uncertainty. This is supported by the credibility of the policies and the effective policy mix of Bank Indonesia and the Government. Going forward, Bank Indonesia will continue to closely monitor global and domestic economic and financial developments, formulate and execute the necessary policy measures to ensure macroeconomic and financial system stability, including adjusting policy stances when necessary, and continue to strengthen the synergy with the Government to accelerate the national economic recovery.

JCR views that Indonesia's economy recovery will continue to improve. Indonesia's economic growth in 2024 is estimated to reach 5%, supported by private consumption and investment. The implementation of the Job Creation Law is deemed as being able to increase foreign direct investment (FDI), among others for the development of infrastructure and new Indonesian capital. From the fiscal side, the credibility of fiscal policy is maintained as reflected in the fiscal deficit returning to below 3% of GDP in 2022, supported by the implementation of tax reform and the reallocation of government spending. In 2023, the fiscal deficit falls to 1.66% (provisional figure) and is maintained below 3% for 2024.

On the external front, JCR views the Indonesian economy remained resilient to external shocks, supported by foreign exchange reserves equivalent to 6.5 months of imports. FDI have been increasing steadily supported by an improving business environment, while current account performance challenged by falling commodity prices.

JCR had previously affirmed Indonesia Sovereign Credit Rating at BBB+ with stable outlook (two level above the lowest level of investment grade) on July 27, 2022.

Jakarta 25nd March 2024

Communication Department

Erwin Haryono

Assistant Governor