S&P rates Indonesia notes BB+

Standard & Poor’s said it assigned a BB+ long-term issue rating to benchmark-size euro-denominated senior notes that the Republic of Indonesia proposes to issue as part of its $30 billion global medium-term notes program.

The notes will constitute the direct, unconditional, unsubordinated and unsecured obligations of Indonesia, S&P said.

The outlook on Indonesia is positive.

The ratings balance the country’s low per capita income and developing policy and institutional settings against the improved credibility of its monetary policy, buoyant economic growth and sound public finances, the agency said.

The positive outlook indicates the possibility that S&P could lift the ratings on Indonesia over the next 12 months if the government achieves its stated objective of improving the quality of expenditure.

This would include allowing fuel pump prices to adjust more freely and allocating its public investment budget efficiently, the agency said.

On the other hand, the outlook on the country could be lowered to stable if the government’s reform ambitions wane or macroeconomic imbalances rise, S&P added.

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