"Difference in Understanding" Makes Moody's Outlook Downgrade: Government

RRI.CO.ID, Jakarta - The Indonesian government responded to Moody's downgrade of Indonesia's credit rating outlook for 2026. An official stated this was due to a "difference in understanding".

Moody’s downgraded Indonesia’s credit rating outlook from "stable" to "negative" on Thursday, 5 February 2026. Despite the outlook revision, Indonesia’s credit rating remains at Baa2, maintaining its upper-medium "investment grade" status.

Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that the downgrade is due to a difference in understanding between the Indonesian government and global financial markets. According to him, investments that previously relied on the state budget have now been taken over by Indonesia’s new sovereign wealth fund, Danantara.

"Indeed, our state budget this year is somewhat different because we are rolling out many of the President's flagship programs, such as free nutritious meals, the Red and White Cooperatives, and public services. Those use state budget funds. However, to drive growth through investment, we now have Danantara. So, that is what makes the difference," he said at the Financial Services Industry Annual Meeting 2026 by the country's Financial Services Authority (OJK) in Jakarta on Thursday, 5 February 2025.

Consequently, Airlangga underscored that the government and Danantara need to provide further clarification to rating agencies and financial markets. This includes explaining Danantara's role in mobilizing Indonesia’s state-owned enterprises.

"This is what we must explain. Because in reality, through Danantara, we are unlocking and reforming state-owned enterprises something they have always asked for, so they can be separated (from state bureaucracy) and operate more like the private sector," he said.

Nevertheless, Airlangga noted that other rating agencies still maintain a positive outlook on Indonesia. Both Fitch Ratings and S&P continue to set Indonesia within the "investment grade" category. He also expressed gratitude for Indonesia’s economic growth throughout 2025, which reached 5.11 percent, surpassing that of several other economies, including China and the European Union.

"This growth is higher than China's 5 percent, Saudi Arabia's 4.5 percent, and the European Union's 1.5 percent growth. This certainly provides momentum for strong growth," Airlangga said.