the agency wrote , referring to a government program that forgives back taxes on Indonesian taxpayer ' s hidden assets . Telecommunication companies could also expect a relatively stable business environment , with data revenue driving growth , Moody ' s wrote .
State-controlled “ Telekomunikasi Indonesia ” and its unit “ Telekomunikasi Selular ” are both placed at Baa1 – higher than Indonesia ' s sovereign bonds – with a stable outlook .
Smaller rivals XL Axiata ' s and Indosat ' s debts are only one notch below investment grade but their performance has a chance of improving over the medium term , Moody ' s said .
( Source : Jakarta Globe )
Fitch Ratings Revises Indonesia ' s Rating Outlook to " Positive "
Global credit rating agency Fitch Ratings affirmed Indonesia ' s long-term foreign- and local-currency issuer default ratings at ' BBB- ' but revised the outlook from ' stable ' to ' positive '.
The improvement is primarily attributed to Indonesia ' s low government debt burden and favorable economic growth outlook , while structural reforms ( the government ' s economic policy packages that have been launched since September 2015 as well as the tax amnesty program ) are gradually improving the nation ' s business and investment climate .
Fitch Ratings further stated that it considers Indonesia ' s sovereign ' s exposure to banking sector risks as " limited ". Private credit represents only 36 percent of Indonesia ' s gross domestic product ( GDP ) and the banking system ' s health is relatively strong , although risks built up in the previous credit cycle imply a more challenging operating environment .
Despite the challenging global economic context , Indonesian authorities appear to shift away from chasing their earlier ( and too ambitious ) economic growth targets and instead focus on macroeconomic stability and structural changes that should boost the economy in the longer term .
Therefore , the Indonesian government presented a realistic 2017 State Budget . In fact , on some matters , the government set an " un-ambitious " target ( in an apparent effort to over-deliver rather than under-deliver ). For example , in the 2017 State Budget , the Indonesian government targets a economic growth pace of 5.1 percent year-on-year ( y / y ), while Fitch Ratings put its GDP growth forecast for Indonesia at 5.4 percent ( y / y ) in 2017 ( and 5.7 percent in 2018 ) on the back of structural reforms , monetary easing and rising infrastructure spending .
Fitch Ratings has become more positive about Indonesia ' s medium and long-term economic growth due to the government ' s reform efforts . Eyecatching reforms include a reduction in the number and duration of bureaucratic procedures - reflected by a strong improvement in Indonesia ' s ranking in the World Bank ' s Ease of Doing Business indicator from 106 to 91 - and a more standardized approach to minimum wage setting , which should prevent sudden and steep minimum wage growth in Indonesia ( a big burden for foreign direct investment ).
6 Trade & Investment Bulletin | Number IV / January 2017
However , Fitch Ratings also state that the real impact of the government ' s reform program on investment and GDP growth will depend on the implementation and to what extent the central government continues to create a more conducive investment climate .
Regarding the monetary and exchangerate policy of Indonesia ' s central bank ( Bank Indonesia ) Fitch Ratings said it has been effective in weathering market turmoil , such as through ensuring comfortable foreign-exchange buffers , even though the policy stance could potentially be tested again in 2017 amid general emerging-market turbulence and a strengthening US dollar .
However , Fitch Ratings sees Indonesia as relatively vulnerable to shifts in market sentiment because the nation is largely dependent on commodities for its exports and portfolio inflows to finance its persistent current account deficit ( that