Jakarta, May 24 (Antara) - International ratings agency providing issuer and bond ratings, Fitch Ratings, has said Indonesia has good credit quality in May 2016, according to a press statement received here on Tuesday.
Fitch accorded Indonesia a BBB rating, with stable prospects, which indicates that expectations of a default risk are currently low.
The ratings agency also considers Indonesia worth investing in because of the government's debt burden being low at 26.8 percent of the national Gross Domestic Product (GDP).
In addition, Indonesia's economic growth prospects this year are estimated to be 5.1 percent, and the banking risk is limited.
However, Fitch also noted that there is still a large market sentiment influence of external factors, and Indonesia needs to improve the investment climate.
Responding to the ratings given by Fitch, the Governor of Bank Indonesia (BI), Agus Martowardojo, said Indonesia has proved that it has high adaptability in facing domestic and global economic challenges.
"This indicates that Indonesia has adopted the right policy to maintain its economic stability while achieving sustainable economic growth with a more healthy structure," Agus said.
He added that this has boosted the domestic economy and made it immune to external challenges with several efforts, including organizing the prudence principle in foreign debt management of the non-bank corporation, managing the exchange rate corresponding to fundamental value, managing the adequacy of foreign exchange reserves, and providing a second line of defense.
Fitch also stated that Indonesia's structural reforms through economic policy packages, which have been running since September 2015 will significantly improve the investment climate.
Some of Indonesia's policies, which have been highlighted by Fitch, among others, are the downsizing and accelerating the licensing process to conduct business activities and establishing a minimum wage formula.
In addition, Fitch considers the revision of the Negative Investment List as reflective of the increasing openness of Indonesia among foreign investors.
Fitch also stated that Indonesia's structural reforms are starting to have an impact on market sentiment as indicated by the stable value of the Rupiah.