BI Governor Responds to Fitch's Downgrade of Indonesia's Debt Outlook
Bank Indonesia Governor Perry Warjiyo has responded to Fitch Ratings’ decision to keep Indonesia’s sovereign debt rating at BBB and to revise the debt outlook from stable to negative.
Perry said the affirmation of Indonesia’s BBB rating reflects global confidence in the country’s economic fundamentals, which remain solid.
The outlook adjustment is believed not to reflect a weakening of Indonesia’s economic fundamentals, he said in a formal statement on Wednesday, 4 March 2026. He asserted that Indonesia’s economic prospects remain strong and resilient.
According to Perry, Indonesia’s economy has strengthened as domestic growth remains solid amid rising global uncertainty, inflation remains under control including low core inflation, and the rupiah has strengthened, aided by exchange-rate stabilisation policies in offshore non-deliverable forward (NDF) markets as well as spot and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market.
In addition, Perry said, financial system stability remains well maintained. This is supported by adequate liquidity, banking capital at high levels, and low credit risk. “Furthermore, the widespread digitisation of the payment system, underpinned by stable infrastructure and a healthy industrial structure, also supports economic growth,” he said.
Fitch Ratings downgraded Indonesia’s debt outlook on Wednesday, 4 March 2026. Fitch said the revision reflects rising policy uncertainty and concerns about eroding consistency and credibility of Indonesia’s policy mix amid increasing centralisation of policy-making authority.
“Such developments could weaken medium-term fiscal prospects, dampen investor sentiment, and put pressure on external reserves,” Fitch said in its formal statement on Wednesday, 4 March 2026.
In its assessment, Fitch highlighted the target of 8 percent economic growth, which could lead to a loosening of the mix of fiscal and monetary policy. Fitch itself projects the 2026 budget deficit to reach 2.9 percent of GDP.
Fitch also highlights government social programmes, such as the free nutritious meals (MBG) that consume a high budget. On the one hand, Fitch forecasts government revenue to reach only 13.3 percent of GDP in 2026 and 2027, amid the absence of significant revenue mobilisation measures.