Google

ASEANAFFAIRS
Sign up | Log in

    ASEAN PROFILES

  ASEAN KEY DESTINATIONS

Home  >>   Daily News  >>   Indonesia  News  >>   Investment  >>   Indonesia could reach investment grade in a year
NEWS UPDATES Asean Affairs        18  March 2011

Indonesia could reach investment grade in a year

Related Stories

March 15, 2011
Japanese investment will continue in Indonesia

March 12, 2011
Indonesia projects 42 percent foreign investment increase

March 10, 2011
Indonesia cutting back on IPOs

March 4, 2011
Indonesia moves ahead on IPOs

March 3, 2011
Mitsubishi to invest $20billion in Indonesia

February 28, 2011
Indonesia invests $80 billion in manufacturing

February 25, 2011
France to increase Indonesia investments

Indonesia may see its sovereign ratings upgraded to investment grade in less than 12 months, a top executive from Fitch Ratings announced on Thursday.

Fitch raised the country's BB+ ratings outlook from positive to stable in February, citing its economic growth and a lower public debt ratio. BB+ is one notch below investment grade.

"Typically our outlook has a 12- to 18-month lifetime, but it's not necessary to wait," Andrew Colquhoun, head of sovereign ratings in the Asia Pacific for Fitch, said on Thursday at an investors' seminar. "The 12- to 18-month time frame shouldn't be taken too literally or loosely. We're not saying we will wait definitely 12 months."

He put the chances of a ratings upgrade following the positive outlook at 60 to 70 percent. An investment-grade rating would put Indonesia on par with large, emerging economies such as Brazil, India and China.

"The positive outlook, putting Indonesia on the cusp of investment grade, reflects the country's economic resilience, recent improvement in external liquidity and strengthening fiscal solvency measured by declining public debt ratios," Colquhoun said.

Indonesia's economy grew 6.1 percent last year and is forecast to expand 6.5 percent this year. The nation's debt-to-gross domestic product ratio shrank from 28 percent in 2009 to 26 percent last year.

Fitch also pointed to rising official foreign reserves as building a buffer against global shocks, though it advised authorities to remain cautious in managing surges in short-term capital inflows.

Indonesia's foreign exchange reserve rose to more than $102 billion as of March 10 as the central bank bought US dollars to ease the volatility of the rupiah. Its foreign reserves stood at $96.2 billion in 2010, up from $66.1 billion in 2009.

Fitch sounded a note of caution on inflation, though, saying one of Indonesia's traditional weaknesses poses risks in the short term.

Colquhoun warned the agency might revise the outlook back to stable "if inflation picks up and is out of control or there is some shock that affects the domestic economy in a negative way."

He also said the structural economy needed improvement. Reducing the nation's low average income, widespread corruption as well as tackling infrastructure hurdles were seen as key to improving the investment climate.

According to Fitch's presentation, the ratio of government capital expenditure to GDP in 2010 was just 3 percent, lower than China, Brazil and India at 4 percent. "Structural reforms to tackle these would strengthen the case for an upgrade," Colquhoun said.

Coordinating Minister for the Economy Hatta Rajasa said Indonesia should reach investment-grade in the third quarter.

"I think to wait 12 months, based on our performance, is too slow. This year, we should have investment grade in the third quarter. They should see how we manage our monetary, fiscal policies, investment climate and how we improve our competitiveness," Hatta said.


Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates
Contact: marketing@aseanaffairs.com

Comment on this Article. Send them to  your.views@aseanaffairs.com

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
 
or
submit your comment in the box below
Name

Name


Email

Email



1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code


Today's  Stories    18  March 2011 Subsribe Now !
 • Cambodia opposition leader stripped of MP status
Subcribe: Asean Affairs Global Magazine
 • Indonesia could reach investment grade in a year Asean Affairs Premium
• Book bombs make Indonesians jittery

• Malaysia capital market hits peak

Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry


• Hot money still flowing in February

• Aquino administration proposes nuclear plant

• Nuclear safety in Thailand needs review

• THAI cuts local fares
Asean Analysis    18   March 2011 Advertise Your Brand
• Cambodia on a learning curve Sponsor Our Events
Asean Stock Watch    18  March 2011
• ASEAN Markets to Rally‏
Global News Impacting Asia    17 November 2010
• Bank of America sees Asian inflation
• Lloyd’s increases insurance push in Malaysia
• Wells Fargo analyst on euro
• Obama’s visit to Asia

ASEAN NEWS UPDATES      Updated: 04 January 2011

• Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent

• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore
• Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline
• Vietnamese PM projects 10-year socioeconomic plan

ASEAN  ANALYSIS

This year in Thailand-what next?

AseanAffairs  
04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand
asean@aseanaffairs.com