Indonesia Must Turn S&P Confidence Into Reform Action, Economist Says
Indonesia Must Turn S&P Confidence Into Reform Action, Economist Says
Jakarta. Indonesia’s reaffirmed investment-grade sovereign rating by S&P Global Ratings should not breed complacency, as the government’s next challenge is delivering on its reform agenda to sustain investor confidence, according to Trimegah Sekuritas Indonesia.
Fakhrul Fulvian, chief economist at Trimegah Sekuritas Indonesia, said S&P’s decision to maintain Indonesia’s BBB long-term sovereign credit rating with a stable outlook sends a constructive signal. He said the government’s focus should now shift from communicating policies to executing them consistently, arguing that successful implementation will be key to preserving investor confidence.
S&P highlighted several of Indonesia’s economic strengths, including stronger state revenue in the first half of 2026, the government’s commitment to keeping the state budget deficit below 3% of gross domestic product, and spending adjustments aimed at maintaining fiscal discipline.
The ratings agency also took a more favorable view of reforms involving Danantara and the establishment of Danantara Sumberdaya Indonesia (DSI).
“This is recognition that the reforms underway are beginning to be understood by global investors. What S&P appreciates is not just the ideas themselves, but its confidence that implementation will continue to improve,” Fakhrul said.
Still, he said the government has more work to do, particularly in providing greater clarity on the design and implementation of DSI. Fakhrul said that investors are seeking clearer explanations of DSI’s operational mechanism, corporate governance framework, links to Indonesia’s balance of payments, impact on state revenue, and coordination with fiscal and monetary policies.
“DSI has the potential to become one of Indonesia’s biggest structural reforms in recent years. Transparency and clear communication are therefore essential so investors understand how the policy works and how it will strengthen state revenue and Indonesia’s external resilience,” he said.
Fakhrul added that recent months have shown how clear policy communication can reduce uncertainty, lower risk premiums, and strengthen investor confidence in Indonesia’s economic direction. “The government needs to maintain fiscal discipline, continue structural reforms, strengthen policy coordination, and ensure consistent communication. Doing so will create greater room for Indonesia to secure a sovereign credit rating upgrade in the future,” Fakhrul said.
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