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2026-07-13 17:50:10
[S&P Reaffirms Indonesia's BBB Rating; Resource Centralization Reforms Expected to Boost Fiscal Performance; Short-Term Headwinds Do Not Change Recovery Direction] ⑴ In a report, S&P Global Ratings stated that if policy implementation continues to improve, the Indonesian government's reforms aimed at centralizing resource and mineral sector management and curbing tax revenue losses are expected to gradually boost national fiscal revenue and export earnings. ⑵ The report acknowledges that the country's fiscal and external situation is currently weak due to a combination of factors, including high energy prices, rising interest rates, depreciating rupiah, policy uncertainty, and rising debt. However, S&P believes these pressures are temporary. ⑶ As commodity prices rise and the government implements spending cuts, this weakness should gradually recover. Based on this, S&P maintains Indonesia's long-term sovereign credit rating at BBB. ⑷ S&P expects the Indonesian government to continue adhering to fiscal discipline, keeping the fiscal deficit within the statutory limit of 3% of GDP, and maintaining a clear path for fiscal consolidation. (5) Regarding economic growth, although Indonesia recorded a strong growth of 5.6% in the first quarter, S&P expects Indonesia's full-year economic growth to slow to 5.1% due to continued external uncertainties and rising domestic interest rates.
