By Ovunc Kutlu
ISTANBUL (AA) - Fitch Ratings announced Friday it affirmed Indonesia's long-term foreign-currency issuer default rating at BBB with a stable outlook.
The agency said Indonesia's rating balances a favorable medium-term economic growth outlook and low government debt to GDP ratio against weak government revenue and lagging structural features.
"Several external finance metrics, such as its current account, are stronger than pre-Covid-19 pandemic levels, but should normalise to some extent in the next few years, on the assumption that commodity prices will fall further," it said in a statement.
Fitch said it expects India's gross domestic product (GDP) growth to come in at 4.9% this year, slightly down from 5.05% in 2023, but then accelerating to 5.3% in 2025.
The agency said it expects slower export momentum for Indonesia in the first half of this year, due to weakening global demand, but added that strong domestic investment and consumption will most likely support economic growth.
With consumer inflation under control at 2.8% in February, and core inflation at 1.7%, Fitch said it expects Bank Indonesia to cut its policy rates by 75 basis points to 5.25% later this year.
Indonesia's central bank is anticipated to cut interest rates by an additional 75 basis points to 4.5% next year, according to Fitch.