"With Indonesia having investment grade status, investors would assume the risks of investment in Indonesia to be good. But unfortunately, the business climate in Europe and the US next year will probably still be bad," Airlangga Hartarto said.
Jakarta (ANTARA News) - Indonesia is likely to see a significant increase in foreign investment after it has reached "investment grade" which is expected to happen three to six months from now, the head of a businessmen`s group said.

"According to our calculations, and information from analysts and researchers, Indonesia will reach `investment grade` three to six months from now," Airlangga Hartarto, chairman of the Indonesian Issuers Association (AEI), said here on Tuesday.

However, the benefits of the investment grade status would be much reduced by the business climate in Europe and the US which could obstruct the flow of investment to Indonesia.

"With Indonesia having investment grade status, investors would assume the risks of investment in Indonesia to be good. But unfortunately, the business climate in Europe and the US next year will probably still be bad," he said.

Airlangga was confident Indonesia would earn the investment grade qualification in the near future. "Thus it will significantly increase foreign investment, and then we will get out of the crisis," he said.

Meanwhile, international rating agency Fitch Ratings said it would consider raising Indonesia`s rank to "investment grade" over a period of at least 12 months because the required calculations were quite complex.

"We are still considering raising Indonesia to `investment grade` status over a period of 12-18 months. That`s because the `credit rating` requires quite complicated calculations, not just one factor alone. There are several factors to consider for Indonesia," said Head of Sovereign Ratings Asia Pacific Fitch Andrew Colquhoun.

The first factor to consider was the inflation rate until the end of the year. According to Andrew, Bank Indonesia should be able to hold the inflation steady.

Besides, infrastructure must also be a concern because it referred to government policies requiring immediate action.

"Foreign participation in the bond market also needs to be based on considerations of Indonesia`s performance during the 2008 crisis. Indonesia was quite strong in dealing with the crisis," said Andrew.(*)

Editor: Heru Purwanto
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