Fitch Downgrades Indonesia's Outlook, Finance Ministry Claims the Economy Is Strengthening

JAKARTA, investor.id - The international rating agency Fitch Ratings has changed the outlook from stable to negative. The revision was made because Fitch assessed an increase in policy uncertainty and a weakening of the consistency and credibility of Indonesia’s policy mix amid rising centralisation of policy-making authority. In response, Deni Surjantoro, Head of the Bureau of Communications and Information Services at the Ministry of Finance, said the government remains committed to maintaining macroeconomic stability and fiscal discipline in line with the law, improving the business climate through debottlenecking and deregulation to spur investment and economic growth, and strengthening structural reforms to enhance the resilience of the national economy. “The government continues to enhance cross-sector coordination so that the momentum of accelerated economic growth can be maintained in the medium term, while preserving stability,” Deni said in a formal statement received on Wednesday (4 March 2026). He said that various corrective measures have shown improvements. After achieving a high growth of 5.39% in the fourth quarter of 2025, a range of early-2026 indicators of economic activity — including the consumption confidence index, the Purchasing Managers’ Index (PMI), electricity consumption (business and industry), and vehicle sales (cars and motorcycles) — continued to show momentum of improvement. Fiscal revenue also grew Year-on-Year in January 2026 by 9.5% and by 12.8% in February, driven mainly by tax receipts — up 30.7% in January and 30.4% in February. Government expenditure also grew, by 25.7% in January and 41.9% in February. The acceleration of spending and stimulus to the economy is being implemented in a measured manner to sustain the continually improving growth momentum, while ensuring a healthy APBN and maintained fiscal discipline. The government consistently maintains fiscal-monetary policy coordination as a priority to safeguard market confidence and ensure that priority programmes run effectively and accountably. Meanwhile, collaboration with the Investment Management Board (BPI) Daya Anagata Nusantara (Danantara) is being strengthened as a new growth engine driving the economy through strategic investments outside the APBN. At the same time, Danantara remains focused on sustainable profits, including continuing to unlock high-value private investment. “The governance and operations of Danantara are maintained with measurable risks, making Danantara a credible strategic investment instrument that is well managed and aligned with long-term macro stability,” said Deni. Fitch had previously highlighted rising uncertainty concerning Danantara’s mandate. There are concerns that Danantara’s role could spill over into fiscal activities, as the fund involves debt-based investments to support government policy priorities, which could reduce fiscal transparency and raise the risk of sovereign obligations.