Jakarta. The Financial Services Authority (OJK) moved to reassure investors after Moody’s affirmed Indonesia’s Baa2 sovereign rating while cutting the outlook to negative, a shift Finance Minister Purbaya Yudhi Sadewa said does not reflect weakening economic fundamentals.

OJK said the rating affirmation reflects Indonesia’s resilient growth, disciplined macroeconomic framework, and stable financial sector performance. Interim chair of the OJK Board of Commissioners, Friderica Widyasari Dewi, emphasized that the regulator will continue strengthening financial system stability while supporting national economic expansion through prudential policies, deeper financial markets, and sustained sector resilience throughout 2026.

“All of these agendas are directed at safeguarding financial system stability, supporting financing for government priority programs, and strengthening the confidence of market participants and investors,” Friderica said in Jakarta on Friday.

Indonesia’s economy grew 5.11% in 2025, underscoring its ability to maintain momentum amid external pressures. OJK added that Moody’s continued placement of Indonesia above many peers with similar ratings signals confidence in the country’s policy capacity, while policy coordination within the Financial System Stability Committee will be reinforced to preserve stability and expand long-term development financing.

Finance Minister Purbaya Yudhi Sadewa acknowledged the outlook downgrade but maintained that the government remains consistent in strengthening economic fundamentals, arguing that rating agencies primarily assess a country’s willingness and ability to repay debt.

“Rating agencies evaluate whether we can repay our debt and whether we are willing to repay it. We meet both conditions, so there should be no problem. I believe this is only short term,” Purbaya told reporters at the Finance Ministry on Friday.

He added that Indonesia’s economy has entered a positive trajectory, supported by stronger fourth-quarter 2025 growth of 5.39%, up from 5.04% in the previous quarter, with momentum expected to continue into 2026.

“As long as they see our economic foundations improving, especially with solid fourth-quarter performance, there is no reason to fear that we cannot or will not repay our debt,” he said, adding that growth is likely to accelerate further ahead.

As previously informed, Bank Indonesia Governor Perry Warjiyo also downplayed the outlook revision, saying it does not reflect a deterioration in macroeconomic fundamentals. He pointed to contained inflation of 2.92% within the central bank’s target range, stable rupiah conditions supported by firm policy measures, ample banking liquidity, strong capital buffers, and low credit risk.

Moody’s, however, cited several factors behind the negative outlook:

• Reduced policy predictability, reflecting shifting communication and direction that may weaken investor confidence.
• Concerns over large-scale fiscal programs, including free nutritious meals (MBG) and subsidized housing, which could widen budget deficits amid relatively low tax revenue.
• Uncertainty surrounding Danantara’s governance and contingent liabilities, raising the risk that state-owned enterprise debt could ultimately pressure the government balance sheet if not carefully managed.