2022 State Budget: Fiscal Policy and Structural Reform

A Well Maintained of Indonesia's Sovereign Credit Rating in The Midst of Economic Recovery BBB+ BBB BBB- Invotment Coo BB+ Below Investment Grade BB BB- B+ 2008 R& S&P Fitch Moody's Fitch Ratings November 2021, Rating Affirmed at BBB/Stable BBB/ Stable "Indonesia's rating balances a favourable medium-term growth outlook and a still low, but rising, government debt/GDP ratio against a high dependence on external financing, low government revenue and lagging structural features such as governance indicators and GDP per capita compared with 'BBB' category peers. 2007 2008 2009 2010 2011 2012 2019 2014 2015 2018 2017 2018 2019 2020 2021 S&P Global Ratings April 2021, Rating Affirmed at BBB/Negative BBB/ Negative "The affirmation reflects Indonesia's solid economic growth prospects and historically judicious policy dynamics. The negative outlook reflects our expectation that Indonesia will face sustained fiscal and external pressures related to the COVID-19 pandemic over the next 12-24 months". MOODY'S Feb 2020, Rating Affirmed at Baa2/Stable Baa2/ Stable "The affirmation of the ratings is underpinned by a number of credit strengths - including Indonesia's robust and stable growth rates and a low government debt burden, preserved by consistent fiscal discipline and emphasis on macroeconomic stability - as well as persistent credit challenges." R&I April 2021, Rating Affirmed at BBB+/Stable JCR BBB+/ Stable "In R&l view, Indonesia's economy that plunged in 2020 will likely return to a pre-coronavirus growth level in one to two years. The government's structural reform efforts are also expected to boost growth potential in the medium to long term. Despite the pressure on the fiscal side caused by policy responses, the government debt ratio remains relatively low. The economic resilience to external shocks is maintained thanks to flexible policy responses by the government and the central bank and ample foreign reserves". December 2020, Rating Affirmed at BBB+/Stable BBB+/ Stable "The ratings mainly reflect the country's solid domestic demand-led economic growth potential, restrained public debt, and resilience to external shocks supported by flexible exchange rate and monetary policies and accumulation of foreign exchange reserves. Additionally, the government has been maintaining the momentum of economic structural reforms even amid the pandemic, as evidenced by the enactment of the "Omnibus Law on Job Creation". 22 12

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