Indonesia stated that S&P Global Ratings' choice to maintain its investment-grade credit rating boosts investor confidence, as the government aims to preserve economic growth and enhance fiscal credibility amidst global uncertainty.
On Monday, S&P confirmed Indonesia's long-term sovereign rating at BBB and its short-term rating at A-2, maintaining a stable outlook for both.
The confirmation maintains Indonesia's status in the investment-grade tier despite ongoing global economic challenges.
Also Read: LNG Reemerges as Strategic Fuel for Korea's AI, Chip Ambitions
"The decision reflects confidence in Indonesia's economic resilience. We must build on this momentum," Ferry Irawan, a deputy at the Coordinating Ministry for Economic Affairs, says.
S&P predicts that Indonesia's economy will grow approximately five percent each year over the upcoming two to three years, with a growth rate of 5.1 percent in 2026 and an average of 4.9 percent from 2026 to 2029.
Ferry stated that the government will enhance governance, transparency, and local financial markets to maintain investor trust.
"Good governance is not only about compliance. It strengthens institutional credibility, provides certainty for businesses and investors, and supports sustainable economic growth," he says.
S&P indicated that Indonesia's rating might face challenges if fiscal and external metrics consistently deteriorate.
On the other hand, the agency stated that enhancements in fiscal and external metrics might lead to a rating upgrade in the future. The government additionally referenced favorable evaluations from various international organizations.
The International Monetary Fund estimated that Indonesia's economy would expand by five percent in 2026, whereas the Asian Development Bank kept its 2026 growth prediction at 5.2 percent.
Earlier, Finance Minister Purbaya Yudhi Sadewa stated that he has showcased Indonesia's economic and fiscal fundamentals to the global rating agency S&P Global Ratings. A significant message from the government was its dedication to maintaining the state budget deficit (APBN) under 3 percent of gross domestic product (GDP).
The finance minister detailed strategies to keep the deficit at that level for both this year and the next. Moreover, the government showcased advancements in national economic conditions, highlighting state revenue performance, which is viewed as superior compared to the prior year.
Also Read: E& Exits Vodafone with $5.95 Billion Stake Sale
Sadewa indicated that tax income displayed considerable increase. In May 2023, tax income increased by 22.1 percent relative to the same timeframe last year. He mentioned that the progress was an encouraging indicator for Indonesia's financial health in the face of global economic difficulties.
The minister stated that the discussion with S&P Global Ratings was a part of the government's duty to clarify Indonesia's economic situation. Following the receipt of information from the government, S&P will further deliberate on it with its internal team.
Also Read: Singapore Rolls Out Measures to Integrate Foreign Professionals
To uphold the stability of the national financial system, the government along with the House of Representatives (DPR) has sanctioned amendments to Law No. 4 of 2023 regarding the Development and Strengthening of the Financial Sector (P2SK).