Fitch Cuts Outlook to Negative, Government Assures Fiscal Discipline is Maintained - VOI.id

Fitch Cuts Outlook to Negative, Government Assures Fiscal Discipline is Maintained

JAKARTA - The government through the Ministry of Finance confirmed that Indonesia’s economic fundamentals remain strong and stable, even though Fitch Ratings maintained Indonesia’s debt rating at the BBB level with a revision of the outlook from stable to negative.

Head of the Bureau of Communication and Information Services of the Ministry of Finance, Deni Surjantono, said that the decision reflected Fitch’s confidence in the fundamental strength of the national economy and the medium-term outlook which remained solid.

This affirmation is the final stage of the Fitch evaluation process after conducting a visit and a series of meetings in Jakarta on February 23-26, 2026.

In the agenda, Fitch discussed with a number of ministries and agencies, including the Coordinating Ministry for Economic Affairs, the Ministry of Finance, Bank Indonesia, BP BUMN, Financial Services Authority, Danantara, as well as the Investment and Industrialization Ministry/BKPM.

“Fitch assesses that Indonesia has a good track record in maintaining macroeconomic stability, controlled inflation, and a relatively moderate public debt structure compared to its peers,” Deni said in a statement, quoted Thursday, March 5.

In fact, the rating agency gave an additional assessment on the macroeconomic aspect in the form of a qualitative overlay +1 notch as a form of appreciation for the credibility of policies and the resilience of the national financial sector.

In its report, Fitch projected Indonesia’s economic growth to be in the range of 5 percent in 2026-2027, higher than the median of BBB-rated countries.

The government debt ratio, which is estimated at around 41 percent of GDP, is also considered to be within safe limits and fiscal discipline, and the strong domestic demand is also a supporting factor for Indonesia’s economic resilience.

However, the change in outlook to negative reflects a number of notes that need to be anticipated where Fitch said the outlook could return to stable if policy consistency and macroeconomic stability are maintained.

The government also emphasized its commitment to maintain fiscal discipline in accordance with legal provisions, while continuing structural reforms to strengthen economic resilience and efforts to improve the investment climate through deregulation and debottlenecking are also being carried out to encourage growth.

A number of economic indicators at the beginning of 2026 showed a positive trend, after the economy grew 5.39 percent in the fourth quarter of 2025, indicators such as the consumer confidence index, manufacturing PMI, industrial sector electricity consumption, and motor vehicle sales recorded improvements.

In terms of fiscal policy, state revenues at the beginning of the year also showed strong performance, Finance Minister Purbaya Yudhi Sadewa said that state revenues grew 9.5 percent year-on-year in January and 12.8 percent in February 2026, mainly driven by tax revenue growth of over 30 percent year-on-year, state spending also increased significantly in the same period.

The government ensures that accelerated spending and stimulus are carried out in a measured manner to maintain the momentum of growth without disturbing the health of the state budget.

In addition, fiscal and monetary coordination will continue to be strengthened to maintain market stability and confidence.

“In addition, coordination of fiscal and monetary policies remains a priority to maintain market confidence and ensure that priority programs run effectively and accountably,” said Deni.

In addition, the government encourages collaboration with Danantara as a new growth engine through strategic investments outside the APBN, while still prioritizing credible governance, measurable risk management, and long-term macroeconomic sustainability.

“Danantara’s governance and operations are maintained with a measurable risk, so that Danantara becomes a credible strategic investment instrument, well managed, and in line with long-term macroeconomic stability,” he concluded.