Good news comes from one of the world’s leading credit rating agencies. S&P Global Ratings officially maintained Indonesia’s sovereign credit rating at the BBB level for the long term and A-2 for the short term, with a stable outlook. S&P’s decision sends a positive signal that Indonesia’s economic fundamentals are still considered solid amid global economic uncertainties and fiscal challenges. This decision has the potential to reduce market concerns about the risk of a downgrade on Indonesia’s debt, while maintaining global investors’ confidence in the country’s financial assets. This sentiment also has the potential to become a positive catalyst for the bond market, the rupiah exchange rate, and the IHSG, especially amid market attention on MSCI accessibility issues and global policy dynamics.
In its report, S&P Global Ratings outlined several positive views that formed the basis for the decision to maintain Indonesia’s rating and outlook. Here is the summary:
Strong economic growth:
1. Indonesia’s economy grew 5.6% year-on-year in the first quarter of 2026, supported by holiday spending and larger fiscal spending disbursements. S&P projects 5.1% growth this year and an average of 4.9% per year for 2026–2029.
2. National revenue recovering: National revenue rose 21% in the first half of 2026 compared to the same period last year, driven by the easing of technical disruptions in the core tax administration system and the recovery of non-tax revenue from natural resource sectors.
3. Downstreaming and Danantara as pillars: The downstreaming policy and the role of Danantara and PT Danantara Sumberdaya Indonesia (DSI) are assessed as having the potential to curb under-invoicing and transfer pricing practices, thereby boosting export revenue.
4. Fiscal discipline maintained: Indonesia’s fiscal deficit is projected to remain below 3% of GDP, in line with applicable rules and across-government fiscal discipline track record.
5. Stable political institutions and policies: S&P assesses that Bank Indonesia’s operational independence remains intact, as demonstrated by the aggressive interest rate hike in June 2026 to counter rupiah pressure.
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