Global and Domestic Economic Uncertainty Clouds Corporate Credit Ratings
PT Pemeringkat Efek Indonesia (Pefindo) says Indonesian businesses, particularly companies rated by Pefindo, are facing pressure in the second quarter of 2026 amid high global and domestic economic uncertainty.
The Pefindo Net Rating Action indicator declined to -1 (minus one), after previously standing at 0 (zero).
Head of Pefindo’s Economic Research Division, Suhindarto, said that based on observations of 71 published rating actions, the decline in the Pefindo Net Rating Action in the second quarter of 2026 came alongside three companies being downgraded, exceeding the two companies that received rating upgrades.
“The percentage of negative bias has also increased in line with the growing number of companies assigned negative outlooks and CreditWatch under current conditions,” Suhindarto said in his research, quoted on Sunday (26 July 2026).
Even so, the rating distribution in the first half of 2026 improved compared with the same period a year earlier. This was reflected in a rising percentage of companies in the investment grade category.
The percentage of rating affirmations relative to overall rating actions assigned by Pefindo has also shown an upward trend, indicating relatively good stability in company performance. “The default rate based on issuing companies and instrument value declined in the second quarter of 2026,” Suhindarto explained.
Earlier, Pefindo stated that geopolitical risks and exchange rates are among the factors it monitors when assigning corporate ratings, as both risks have the potential to lower or raise corporate ratings.
Head of Pefindo’s Non-Financial Services Rating Division 1, Martin Johannes, explained that sectors involved in purchases and sales using foreign currencies would be affected by the weakening rupiah. This could relate to raw materials and other related matters.
“In our monitoring, downstream sectors such as stainless steel, HPAL and aluminium are to a greater or lesser degree exposed to geopolitical risks and the weakening rupiah,” Martin said at a press conference on Wednesday (22 July 2026).
Martin added that the transportation, tourism, construction services, retail and property sectors would also be affected by these two risks.
“This causes demand in the plantation industry to be more stable and more solid, so we assess that companies operating in the palm oil plantation sector are benefiting from the conditions currently being faced,” Martin explained.