S&P Global Ratings has affirmed Indonesia's sovereign credit rating at BBB with a stable outlook, providing a significant positive signal for the incoming administration of President-elect Prabowo Subianto. This decision comes despite S&P's expressed concerns regarding Indonesia's ratio of interest rate burden to revenue, which has exceeded 15% in 2025 according to some estimates. Finance Minister Purbaya Yudhi Sadewa stated that he convinced S&P that this issue is "controllable going forward and not at all at a dangerous level," highlighting the government's commitment to maintaining a budget deficit below 3% of GDP.
The stable outlook from S&P is attributed to Indonesia's robust growth prospects, sound fiscal policy frameworks, and relatively low burden of net external and government debt. S&P also noted the government's commitment to the 3% annual fiscal deficit ceiling as a key anchor for fiscal sustainability. The rating agency also expects the continued development of the country's commodity-based industries to maintain external stability.
However, S&P has indicated that the rating could face downward pressure if the government's debt-to-GDP ratio persistently increases above 3%, or if the interest payment to revenue ratio consistently exceeds 15%. This caution aligns with earlier moves by other rating agencies; for instance, Moody's Ratings revised Indonesia's outlook from stable to negative in February 2026, citing weakening governance and increasing fiscal risks amid an estimated 2.9% GDP deficit in 2025. Fitch Ratings also maintained Indonesia's credit rating but downgraded its outlook from stable to negative.
Bank Indonesia Governor Perry Warjiyo welcomed S&P's affirmation, stating it reflects strong confidence from international stakeholders in Indonesia's macroeconomic stability and robust growth economic prospects. He emphasized the effective synergy of policy mix between the Government and Bank Indonesia. S&P previously maintained Indonesia's Sovereign Credit Rating at BBB with a stable outlook on July 30, 2024, and July 29, 2025. An S&P team is scheduled to visit Indonesia in June to conduct a thorough reassessment of the country's economy and budget.
An upgrade to Indonesia's sovereign credit rating would depend on a stronger capacity to service external debt, supported by higher external revenues or reduced dependence on external financing. Conversely, a prolonged structural weakening in export revenues could also lead to a downgrade.
