Jakarta. Indonesia is seeking to reassure investors by pushing regulatory reforms and accelerating downstream industrial projects after Moody’s revised the country’s sovereign outlook to negative, a senior Investment Ministry official said on Monday.

Moody’s Ratings has maintained Indonesia’s sovereign credit rating at Baa2 but revised the outlook to negative, warning that weakening policy predictability and governance risks could erode investor confidence and raise borrowing costs if left unaddressed.

Tirta Mursitama, Senior Advisor for Investment Equity and Partnership at the Investment Ministry, said such external assessments should be viewed as early warnings rather than deciders of Indonesia’s long-term trajectory.

“External ratings are important as an alert, but they do not change our economic fundamentals,” Tirta said, stressing that institutional stability and reform momentum remain intact despite global geopolitical and financial uncertainty in the Jakarta Globe Club discussion in Jakarta on Monday.

He added that maintaining confidence among existing investors has become the government’s immediate priority, alongside efforts to attract new foreign capital needed to meet Indonesia’s long-term growth ambitions, including a target of achieving 8% economic expansion by 2029. Indonesia's economy grew by 5.11 % in 2025.

“Number one is to keep existing investors happy. At the same time, we must continue inviting new investors because domestic capital alone is not enough,” he said.

Improving licensing efficiency — particularly through upgrades to the Online Single Submission system, a centralized digital platform that integrates business licensing and permits into a single online portal — remains central to the government’s efforts to streamline bureaucracy and reduce operational friction for businesses.

Despite the more cautious external outlook, investment performance has remained strong. As previously reported, total investment realization in 2025 exceeded the government’s target, reaching Rp 1,931 trillion, or 101.3% of the Rp 1,905 trillion goal, according to Danantara CEO and Investment Minister Rosan Roeslani.

Indonesia’s downstream industry strategy remains a key pillar of its investment story, as the government shifts the economy toward higher value-added production, technology transfer, and the development of skilled workers. Several strategic projects have recently moved into the implementation stage, with more set to begin this year as the focus turns from planning to execution.

“Downstream industrialization is not only about processing raw materials. It is about bringing technology, developing human capital, and ensuring investors grow together with Indonesia for the long term,” Tirta said.

He added that global investment dynamics are increasingly shaped by environmental, social, and governance considerations, requiring Indonesia to balance capital inflows with sustainability safeguards and alignment with international standards, including reforms linked to its OECD accession path.

“Investment today must be responsible and sustainable. If we ignore environmental and social impacts, the risks will be much greater in the future,” he said.

Despite tighter global conditions, Tirta expressed confidence that investment realization targets remain achievable, supported by domestic market strength, policy continuity, and closer coordination between the public and private sectors.

“We remain optimistic. The fundamentals are there, and Indonesia continues to be a strong destination for long-term investment,” he said.

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