TEMPO.CO, Jakarta - The credit rating agency S&P Global Ratings has affirmed Indonesia's BBB debt rating with a stable outlook, stating that it expected the government revenue to continue improving this year and the state budget deficit to be maintained under 3 percent of the GDP.
"Our ratings on Indonesia reflect the economy's robust growth prospects, generally prudent macroeconomic policy settings, and relatively light net external and government debt burden compared to peers," S&P wrote in its announcement on Monday, July 13, 2026.
However, S&P also noted Indonesia's "modest GDP per capita, narrow export and fiscal revenue bases, and a domestic financial sector that is less deep and diversified than peers."
S&P projected that Indonesia's economy will grow in the range of 5 percent over the next two to three years, despite the surge in oil prices.
In their analysis, they believed that the establishment of PT Danantara Sumberdaya Indonesia (DSI) could impact investment sentiment and economic growth. However, this is not the base scenario for S&P as they believe the government is responsive to industry input and has shown flexibility in policy implementation.
S&P forecast that the government will remain committed to keeping the state budget deficit below 3 percent of the GDP. However, oil price surges will raise compensation and subsidy payouts to maintain subsidized fuel prices.
S&P also highlighted the government's steps to trim the free nutritious meal (MBG) program spending, expecting a third of the initial MBG budget will be cut through program parameter changes, efficiency improvements, and tightened supervision.
Although the fiscal deficit is under control, S&P warned that pressure on government debt payments remains high. This is due to faster accumulation of debt during the pandemic, increased yields on government bonds, and depreciation of the rupiah.
"Improvements in this ratio could hinge on sustainable revenue growth over the next two to three years and the success of government initiatives to broaden the revenue base," the statement read.
Read: Risks Behind Danantara's US$1.5 Billion Global Bond
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