Jakarta. Restoring investor confidence in Indonesia will require credible and predictable policymaking rather than defensive responses to criticism, economists from the Indonesian Economists Alliance (AEI) said during a talk show hosted by B-Universe Media Holdings in Jakarta on Wednesday, as scrutiny rises following Moody’s negative outlook and MSCI’s review freeze.

They warned that sovereign ratings serve as a global benchmark regardless of domestic disagreement.

“Whether we like the score or not, the world reads it as our performance,” AEI economist Wijayanto Samirin said, stressing that sustainable growth and investment depend on meeting those standards.

Fiscal Risks and Governance Concerns
AEI highlighted fiscal pressure, weakening tax revenues, and policy uncertainty as key drivers of negative sentiment.

Teuku Rifky said Indonesia is at a “critical point where reform is needed,” cautioning that further deterioration could lift sovereign yields, raise borrowing costs, and strain the broader economy. He urged policymakers to respond constructively instead of dismissing external assessments.

Governance quality also emerged as central. “The government must show it understands the problem and is willing to listen,” said Dipo Satria Ramli, adding that clearer fiscal discipline and institutional credibility are essential to rebuild trust.

Economist Mohammad Ikhsan warned that headline growth alone masks deeper structural concerns. “Today’s 5%  growth is different from the past because it creates fewer jobs and weaker purchasing power,” he said, noting that growth has not fully translated into stronger household welfare.

He added that both investor confidence and public trust must be safeguarded simultaneously, as “once sovereign ratings fall, rebuilding them takes a very long process.”

Growth Quality and Reform Urgency
Despite steady headline expansion, AEI economists said Indonesia must focus on the quality and sustainability of growth rather than short-term acceleration. “What matters is sustainability. Like a Formula 1 car, fast but not sustainable, it won’t reach the finish. What’s better is consistent speed so it can finish first,” Wijayanto said.

Panelists said current pressure could become an opportunity if followed by credible reform, transparent governance, and clearer policy direction. “The message is simple: investors need policy clarity and credibility,” Wijayanto added.

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