Airlangga Confident Indonesia Will Remain an Emerging Market

Coordinating Minister for Economic Affairs Airlangga Hartarto is optimistic that Indonesia will remain on track as an emerging market, despite some notes for improvement in Morgan Stanley Capital International’s (MSCI) 2026 Global Market Accessibility Review. The government considers the review’s findings as confirmation of Indonesia’s strong economic fundamentals and market access amidst ongoing reform efforts. “We are optimistic that Indonesia will stay on the emerging market path, and the Government is committed to completing this reform agenda to maintain investor confidence,” Airlangga stated in Jakarta on Friday (19/6). In its report released on 18 June 2026 local time, MSCI maintained Indonesia’s status as an emerging market. However, there was one assessment adjustment in the aspect of information flow, which changed from previously positive (+) to negative (-). Despite this, the government views the note as an affirmation of the capital market reform direction it has been pursuing. According to Airlangga, MSCI’s attention is largely focused on market transparency and integrity, which are currently the focus of joint improvements by the government, the Financial Services Authority (OJK), and the Indonesia Stock Exchange (BEI). “MSCI’s note actually confirms that Indonesia’s economic fundamentals and market access remain strong,” Airlangga said. He explained that various reform measures have been and continue to be implemented, ranging from adjustments to free float provisions, increased disclosure of ultimate beneficial owners (UBO), to capital market deepening. MSCI also noted that the access, size, and liquidity of the Indonesian market are still considered adequate, and found no issues related to foreign ownership restrictions, which were a concern in this year’s review. The areas for improvement highlighted by MSCI focus on increasing transparency of share ownership structures and strengthening the integrity of price formation in the market. Additionally, the provision of market information in English is deemed necessary to continue improving to facilitate global investor access. Overall, MSCI stated that the number of assessment improvements in the emerging market group this year was greater than the number of downgrades. Indonesia and Turkey were the two countries that experienced market accessibility assessment adjustments in 2026. However, these changes do not alter Indonesia’s status as an emerging market. “The official market classification decision will be announced by MSCI through the Annual Market Classification Review on 23 June 2026,” Airlangga said. To strengthen the quality of the capital market, the government, together with OJK and BEI, continues to push various reform agendas. These steps include increasing the minimum free float requirement from 7.5% to 15%, effective from March 2026, strengthening ultimate beneficial owner transparency, disclosing the identities of shareholders with ownership above 1%, accelerating the demutualisation of the BEI, and deepening the market by increasing the equity investment limit for pension funds and insurance companies to 20% with a focus on LQ45 stocks. Furthermore, the government is also strengthening rule enforcement and sanctions, improving the governance of publicly listed companies, and tightening synergy among stakeholders to maintain market integrity. Airlangga emphasised that these capital market reforms are supported by well-maintained macroeconomic conditions. Exchange rate stability, controlled inflation, and prudent fiscal and monetary policies are considered important foundations for maintaining investor confidence in the Indonesian economy. “The Government believes that the combination of structural capital market reforms and macroeconomic stability will continue to strengthen the attractiveness and credibility of the Indonesian market in the eyes of global institutional investors,” he said. From the external side, the government and Bank Indonesia continue to maintain market confidence through a measured policy mix, including adjusting the benchmark interest rate to 5.75% in June 2026, strengthening stability and deepening the foreign exchange market, prudent financing management through the issuance of foreign currency-denominated government bonds, and strengthening fiscal and monetary policy coordination. According to Airlangga, this policy combination serves as a buffer for external sector resilience while maintaining investor confidence amidst global economic dynamics. Therefore, the government urges market participants to respond to the MSCI review results proportionally and remain calm.