JAKARTA - International rating agency S&P Global Ratings has again maintained Indonesia's Sovereign Credit Rating at the BBB level for the long term and A-2 for the short term with a stable outlook.
This affirmation reflects the recognition of Indonesia's fundamental economic resilience amid global challenges, ranging from rising geopolitical tensions, commodity price fluctuations, to still tight international financial conditions.
In its report, S&P assessed that Indonesia's rating was supported by the prospect of continued strong economic growth, prudent macroeconomic policies, and relatively low government debt and net foreign debt levels compared to countries with similar ratings.
Coordinating Minister for the Economy Airlangga Hartarto said the decision reflected the international community's confidence in the direction of economic policies implemented by the government.
"The affirmation of the rating by S&P at the BBB level with a stable outlook is an acknowledgment of the consistency and credibility of the Government's economic policies," he said in a statement, Tuesday, July 14.
According to Airlangga, in the midst of global economic uncertainty, Indonesia is still able to maintain economic growth in the range of 5 percent, maintain a budget deficit below 3 percent of gross domestic product (GDP), and continue to strengthen the governance of the natural resources sector.
"This is a positive signal for investors that Indonesia's economic fundamentals remain solid," he said.
He emphasized that the government would continue to improve the quality of policy implementation so that it was more consistent and predictable so as to be able to maintain the trust of market participants.
Airlangga conveyed that the government was committed to maintaining macroeconomic stability, encouraging economic transformation through industrial downstreaming, strengthening the governance of foreign exchange from exports (DHE), and increasing national productivity.
"Consistency and predictability of policies will be the key to pushing Indonesia's ranking to a higher level," he concluded.
Meanwhile, Finance Minister Purbaya Yudhi Sadewa stated that the S&P decision was a form of recognition of the government's commitment to maintaining economic stability while continuing structural reforms.
He assessed that maintaining the investment grade status with a stable outlook shows that Indonesia's economic policy direction remains credible in the eyes of international rating agencies.
"The government will continue to maintain fiscal discipline, strengthen the state revenue base, improve the quality of spending, and ensure that financing is managed prudently, efficiently, and sustainably," he said.
In the future, Purbaya said the government will strengthen the quality of the State Budget (APBN) through the optimization of tax revenue and non-tax state revenue (PNBP), increased taxpayer compliance, digitization of tax administration, optimization of revenue from the mineral and natural resources sector, increased effectiveness of state spending, and more efficient management of financing and debt risk.
S&P also expects improved government revenue and moderate financing costs to expand Indonesia's fiscal space in the coming years.
On the side of structural reform, Purbaya said the government ensured that various strategic agendas were still carried out in an accountable and consistent manner, ranging from natural resource downstreaming programs to strengthening the role of Danantara through a one-stop export policy.
He assessed that the stable outlook maintained by S&P reflects the belief that the pressure on Indonesia's fiscal and external sectors is only temporary.
Purbaya added that this condition is expected to improve as state revenues recover, commodity prices stabilize, the rupiah exchange rate strengthens, and economic reforms are implemented more effectively.
He is optimistic that the combination of strong economic fundamentals, maintained fiscal discipline, sustainable structural reforms, and close policy coordination will be able to maintain the momentum of economic growth while improving Indonesia's competitiveness.
"This credit rating affirmation also strengthens Indonesia's position as one of the countries with solid economic prospects in the region and is a positive signal for global investors that Indonesia remains a credible, safe, and promising investment destination in the long term," he explained.
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