Investors are not happy after S&P Global Ratings left Indonesia, Asia’s best-performing sovereign bond market, at junk status.

After affirming its BB+ rating and positive outlook on June 1, the ratings agency announced it would keep the nation debt rated below investment grade.

Unlike Fitch Ratings and Moody’s Investors Service, which both gave the nation investment grade status more than four years ago, S&P is the only one of the three major debt ratings agencies to kept the debt listed as junk. S&P’s rating of Indonesia hasn’t unchanged since 2011.

Indonesian President Joko Widodo gestures during an interview with Reuters at the presidential palace in Jakarta, Indonesia in this February 10, 2016 file photo. REUTERS/Darren Whiteside
Indonesian President Joko Widodo; REUTERS/Darren Whiteside

Indonesia’s ratio of debt to gross domestic product is the lowest in Asia after China. Rupiah-denominated sovereign debt has lured $4.7 billion of inflows in 2016 as a pickup in government spending bolsters sentiment toward Southeast Asia’s biggest economy. Three interest-rate cuts this year are helping boost growth from a six-year low, and President Joko Widodo plans to increase revenue by offering a tax amnesty for bringing back money stashed abroad, reported Bloomberg.

“I simply cannot rationalize this failure to upgrade, as they have been well behind the curve to begin with,” Edwin Gutierrez, the London-based head of emerging-market sovereign debt at Aberdeen Asset Management, told Bloomberg. Aberdeen  manages $421 billion globally. “I’m not sure what kind of grudge they hold against Indonesia, but its debt ratios have been commensurate with an investment-grade country for a long time.”

In it’s written statement, S&P said while Widodo’s administration has reduced energy subsisies and cut red tape, the credit quality of Indonesian companies has worsened since the end of 2014 as commodity prices have plunged, and bad loans at banks have climbed form a record low in 2013. It added that the government’s fiscal deficit is expected to increase.

S&P analysts Kyran Curry and YeeFarn Phua said in a written statement, that an upgrade could occur over the next 12 months if Indonesia cuts deficits and implements fuel subsidy changes fully.

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