Halister News

(Bloomberg) -- Coal price slump has affected Indonesia’s economic growth over the past year and may delay a rating upgrade, Kim Eng Tan, head of Asia-Pacific sovereign ratings at Standard and Poor’s, says in interview.

• Indonesia’s fuel subsidy reform has greatly helped to bring stability to economy, so even if oil prices rise there won’t be too much negative impact on the fiscal or trade deficits, Singapore-based Tan says
• If the govt can carry out reforms in areas that increase growth potential that will help; even without these reforms, if deficits continue to narrow, that will aid rating
• A positive outlook means an upgrade in the following 1-2 yrs is likely, says Tan
• NOTE: S&P rates Indonesia at its top junk level, while Fitch and Moody’s assess it at lowest investment grade; S&P changed Indonesia’s outlook to positive from stable in May 2015
• NOTE: Asia-Pacific benchmark coal prices fell 14% in 2015 and have more than halved since end of 2011; Indonesia’s economy grew 4.79% in 2015, least since 2009