No immediate change in sovereign rating: S&P

In a research released on June 9, the rating agency noted that there is little difference in the proposed reform agenda by the two candidates. 

"The two candidates offer similar policy agendas with a nationalist tone, not promising a breakthrough in microeconomic reforms," it said.

Joko Widodo of the Party Of Democratic Struggle (PDI-P) and Prabowo Subianto representing Gerindra both aim to boost infrastructure provision,

increase agricultural output to raise domestic food production, and protect domestic industries. Each has indicated a desire to gradually reduce subsidies, a hot topic in Indonesia, and channel freed-up funds into infrastructure and education. They have also come out strongly on tackling corruption, an issue close to voters' hearts. We also expect both candidates to adhere to conservative fiscal and debt management. 

"We see limited upside potential for the rating amid some risk of slow or inadequate policy responses to shocks and changing economic conditions," S&P said.

It anticipates that the country's sovereign credit quality will benefit under the next administration from continued improvements in fiscal and debt metrics, and possibly from stronger external indicators. Basic macroeconomic policies are likely to prevail, supporting credit fundamentals. 

"However, any boost to policy-making and growth prospects is likely to be insufficient to strengthen the sovereign credit rating on Indonesia We believe

improvements to the rating will be only gradual over the next few years as per capita incomes continue to rise at the current pace. There's also an increased risk of slow or inadequate policy responses to shocks and changing economic conditions, given the fragmentation of parliament."

Indonesia is assigned "BB+" with stable outlook.