Investing.com -- Fitch Ratings Inc. affirmed the credit rating of Indonesia on at BBB+, while leaving the Southeast Asian nations' outlook as stable on Monday.
Citing Indonesia's low government debt burden and limited sovereign exposure to banking sector risks, Fitch reaffirmed Indonesia's rating at BBB+ for the second time in six years. In December, 2011, Indonesia had its credit rating upgraded to investment grade for the first time since 1997, marking the completion of the country's revival from more than a decade of economic strife triggered by the Asian Financial Crisis. Last month, Trading Economics gave Indonesia a rating of 46 while maintaining its positive outlook.
Despite Indonesia's relatively strong outlook, Fitch also noted that the nation remains exposed to shifts in market sentiment and a changing business environment, which it described as "improving, albeit weak." In addition, Fitch said Indonesia could be vulnerable to a sustained external shock to foreign and domestic investors' confidence, as well as an increase in its public debt burden. Both developments could lead to a negative rating action, Fitch said in a statement.
By year's end, Fitch expects real GDP growth in Indonesia of 5.1%, before additional increases to 5.5% in 2017 and 5.7% at the end of 2018. The ratings agency credits a bevy of structural reforms and an acceleration in public capital expenditures for Indonesia's improved economic growth. With average growth of 0.6% over the last 10 years, Indonesia has outpaced its rivals in the region, according to Fitch.
In December, Indonesia reactivated its membership with OPEC in a move the country expects will result in an increase of nearly 3% in average daily output. Last month, Indonesia's oil production rose slightly by 5,000 barrels per day to 731,000 bpd. Over the first quarter, Indonesia pumped an average of 717,000 bpd, up considerably from its 2015-yearly average of 696,000.
The Jakarta Stock Exchange Composite Index gained 31.784 or 0.67% in early trading to 4,743.662.