RRI.CO.ID, Jakarta – Moody’s Ratings has affirmed Indonesia’s sovereign credit rating at Baa2 but downgraded the outlook from stable to negative on February 5, 2026. 

The agency cited concerns over fiscal policy predictability and governance risks, including uncertainties surrounding the financing architecture and the role of the newly established sovereign wealth fund, Danantara Indonesia.

The Indonesian government responded by stressing that the revised outlook does not reflect fundamental economic weakness. Officials emphasized that Indonesia’s macroeconomic indicators remain solid and that the downgrade stems from misunderstandings about recent financing reforms.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the government is preparing a comprehensive clarification regarding Danantara’s role. He underlined the separation between the State Budget and Danantara’s investment and financing functions.

“I have discussed with Danantara, and they will also prepare measures to explain to the rating agency,” Minister Airlangga said at the 2026 Annual Meeting of the Financial Services Industry (PTIJK) in Jakarta on Thursday, February 5, 2026, as quoted by Antara.

Airlangga assessed that many global parties do not yet understand the changes in Indonesia’s financing architecture. He explained that investments previously financed directly from the budget are now transferred through Danantara, while the State Budget (APBN) is focused on the president’s priority programs and public services.

“This is what the rating agencies and the global financial market still have not understood. So this is what we must explain,” he said.

He added that the government will actively communicate this policy framework and emphasized that Danantara was established with strong governance principles as a sovereign wealth fund, in line with international best practices. 

Danantara is expected to encourage SOE reforms to be more flexible and competitive, thereby attracting long-term investment.

From a fiscal perspective, the government continues to maintain budget discipline with a maximum deficit of 3 percent and a debt ratio below 40 percent of GDP. “Our debt is made up of 70 percent rupiah,” said Minister Airlangga. He added that macroeconomic conditions, corporate hedging, and the investment climate remain relatively stable.

Indonesia’s economy also recorded solid performance, with GDP growth of 5.39 percent in the fourth quarter of 2025 and 5.11 percent for the year.

“This growth is higher than China, Saudi Arabia, and the European Union (EU),” said Minister Airlangga. He assessed that this achievement was a catalyst for economic strengthening.

Inflation remained under control within the target range of 2.5 percent plus or minus 1 percent, reaching 2.92 percent in December 2025 and 3.55 percent in January 2026. 

Foreign exchange reserves at the end of December 2025 stood at USD 156.5 billion, equivalent to more than six months of imports and exceeding international adequacy standards. ***