The economic growth accelerated to a 10-year high. Fiscal consolidation significantly reduces government debt, a proof of commitment of fiscal discipline. Prudent macroeconomic management has also led to the declining trend of inflation and exchange rate volatility as well. In the financial sector, the banking sector is well capitalized and in a better balance sheet structure.
Strong macroeconomic fundamentals and resilient microeconomics structures lead to better risk perception, or a more accurate valuation from my point of view, as reflected by the recent rating upgrade. But to be frank, I feel that from the sovereign risk assessment, Indonesia is still somewhat “undervalued”. It is perhaps that major rating agencies tend to be too conservative in assessing Indonesia’s risk profile.