S&P Maintains Indonesia's Rating, BI Confident State Revenue Will Recover

Rating agency S&P Global Ratings has maintained Indonesia’s sovereign credit rating at BBB with a stable outlook. The assessment reflects the continued investment grade status of Indonesia amid global economic uncertainty, supported by expectations of improving state revenues and export performance. Bank Indonesia (BI) Governor Perry Warjiyo said the rating affirmation, announced on 13 July 2026, demonstrates international investor confidence in Indonesia’s macroeconomic stability and solid economic growth prospects. “S&P’s affirmation of Indonesia’s sovereign credit rating at BBB with a stable outlook reflects the sustained confidence of international stakeholders in Indonesia’s macroeconomic stability and solid economic growth prospects,” Perry said in a statement on Tuesday (14/7/2026). According to Perry, the stable outlook is based on the expectation that the weakening of fiscal and external indicators is only temporary. S&P assesses that state revenues will recover this year, while export earnings are expected to increase as commodity prices improve. “The stable outlook reflects the expectation that state revenues will continue to recover this year, while export earnings will increase as commodity prices improve,” Perry said. He added that government policies to increase state revenues and export performance from the natural resources sector are expected to strengthen fiscal conditions in the medium term, especially if policy implementation proceeds consistently and becomes more predictable. In addition, S&P also considers the government’s commitment to maintaining the fiscal deficit below 3 percent as one of the factors supporting the stable outlook and maintaining fiscal sustainability. Going forward, BI sees the opportunity for a sovereign credit rating upgrade remaining open if fiscal and external indicators continue to improve. From the fiscal side, a rating upgrade could be supported by increased state revenues, lower financing costs, and exchange rate stability. Meanwhile, from the external side, a reduction in external debt and gross external financing needs is required. Perry said BI will continue to strengthen the mix of monetary, macroprudential, and payment system policies, as well as enhance coordination with the government to maintain economic stability amid global uncertainty. Meanwhile, Finance Minister Purbaya Yudhi Sadewa said S&P’s decision confirms international confidence in the resilience of the Indonesian economy and the credibility of fiscal and monetary policies. “S&P’s decision shows that the direction of national economic policy remains credible. The government will continue to maintain fiscal discipline, strengthen the state revenue base, improve spending quality, and ensure financing is managed prudently, efficiently, and sustainably,” Purbaya said. Coordinating Minister for Economic Affairs Airlangga Hartarto similarly stated that S&P recognises the resilience of Indonesia’s economic fundamentals amid global geopolitical pressures, commodity price volatility, and tight global financial conditions. According to Airlangga, S&P projects the Indonesian economy to grow around 5 percent per year over the next two to three years, with real growth of 5.1 percent in 2026 and an average of 4.9 percent throughout 2026-2029. S&P also highlighted the increase in state revenues, which grew 19 percent in the first five months of 2026 compared to the same period the previous year. The improvement was driven by the recovery of tax administration, increased value-added tax (VAT) receipts, and higher royalty and dividend revenues from the natural resources sector. In addition, the establishment of PT Danantara Sumberdaya Indonesia (DSI) and the strengthening of the Natural Resources Export Proceeds (DHE SDA) policy are considered to have the potential to strengthen state revenues while increasing export foreign exchange. “The government is committed to maintaining macroeconomic stability while encouraging economic transformation through downstreaming, strengthening the governance of export proceeds, and increasing productivity. Policy consistency and predictability will be key to driving Indonesia’s rating to a higher level,” Airlangga said.