Jakarta - Moody's rating agency projects that Indonesia's average economic growth in 2024-2025 will remain at the pre-pandemic level of around 5.0 percent.
Anushka Shah, as VP - Senior Credit Officer Sovereign Risk Group Moody's Investors Service Singapore Pte. Ltd. said in its publication that the average is higher than other Baa-rated countries, which grow in the range of 3.0%.
"The strong economic growth forecast is mainly supported by the success of various structural reforms taken by the Government directed at improving the investment climate which has an impact on increasing foreign investment, job creation, export growth and increasing government revenue," Anushka Shah said in a written statement received on Thursday (18/4/2024).
In the external sector, continued Anushka Shah, Moody's views that the resilience of the external sector is maintained, reflected in the increasing trade balance surplus.
The implementation of downstream policies is believed to be one of the important factors influencing the increase in the share of exports of commodities that have added value, thereby increasing the diversification of commodity exports and reducing price sensitivity.
"This development is further able to encourage an increase in foreign exchange reserves which reached USD140.4 billion or equivalent to 6.4 months of imports at the end of March 2024," he said.
Moody's considers the close synergy of monetary and fiscal policies to be the basis for maintaining policy credibility. The implementation of the policy mix by Bank Indonesia is seen as able to reduce the volatility of the Rupiah exchange rate amid global financial market uncertainty that affects foreign capital inflows.
Meanwhile, the Government's commitment to keep the fiscal deficit below the limit of 3% of GDP is able to keep the ratio of Government debt to GDP low compared to other countries in the same rank.
In the medium term, the successful implementation of the Government's reform policies is key to achieving higher economic growth targets in line with the vision of a Golden Indonesia 2045.
Moody's previously maintained Indonesia's Sovereign Credit Rating at Baa2 with a Stable outlook on February 10, 2022. (InfoPublik)