No.28/27/DKom
Moody's affirmed the Sovereign Credit Rating of the Republic of Indonesia at Baa2 and revised the outlook to negative, as announced on 5 February 2026. In its report, Moody's stated that Indonesia's rating is affirmed at Baa2 reflecting its strong economic resilience, reflected in stable and solid economic growth, and supported by structural strengths such as natural resources endowments and favorable demographics, which support the medium-term growth outlook. Indonesia's rating affirmation is also supported by the credibility of monetary policy and fiscal prudence, which supports macroeconomic and financial system stability. Meanwhile, the revised outlook is influenced by Moody's view of the risk of a decline in policy predictability, which if continued could have implications for economic performance.
Responding to Moody's decision, Bank Indonesia Governor Perry Warjiyo stated, “The outlook adjustment does not reflect any weakening in Indonesia's economic fundamentals. Despite elevated global uncertainty, the domestic economy remains resilient. Economic growth reached 5.39% in the fourth quarter of 2025, bringing full-year growth to 5.1%. Inflation was maintained at 2.92% in 2025, within the target range, while Rupiah exchange rate stability continues to be strengthened through Bank Indonesia's strong policy commitment. Financial system stability also remains well preserved, supported by ample liquidity, strong bank capital, and low credit risk. Moreover, the continued expansion of digital payment systems—underpinned by reliable infrastructure and a sound industry structure—has further reinforced stability and supported economic growth."
Moody's projects that Indonesia's economic growth will remain in the range of 5% in the short to medium term, with economic resilience maintained. Moody's assesses that the fiscal deficit is expected to remain below 3% of GDP, while monetary policy is seen to continue to support inflation stability. Moody's also predicts that the government's debt-to-GDP ratio will remain low below peers. Nevertheless, according to Moody's, Indonesia still faces the challenge of increasing its revenue base, which is needed to drive economic growth while maintaining macro and financial stability. In this regard, Moody's appreciates the Government's efforts to boost revenue, among others, through improving the efficiency of tax and customs administration.
Going forward, Bank Indonesia forecasts that Indonesia's economic growth prospects in the medium term will remain solid with an upward trend, supported by maintained inflation. Economic growth in 2026 is projected to increase within the range of 4.9–5.7%, underpinned by stronger domestic demand in line with various Government policies and the continued positive impact of Bank Indonesia's policy mix. This positive performance is predicted to continue to increase in 2027, with projected economic growth in the range of 5.1-5.9%, as well as inflation that will remain maintained.
The external resilience of the Indonesian economy also remains strong amid global uncertainty. Indonesia's Balance of Payments (BOP) was maintained solid, driven by a positive trade balance. The trade balance in December 2025 recorded a surplus of 2.51 billion US dollars, supported by non-oil and gas exports based on natural resources and manufacturing. Indonesia's foreign exchange reserve position at the end of December 2025 increased to 156.5 billion US dollars, equivalent to financing 6.4 months of imports or 6.3 months of imports and repayment of the Government's external debt, and above the international adequacy standard of around 3 months of imports. The BOP in 2026 is expected to remain solid with the current account deficit remaining low in the range of deficits 0.9-0.1% of GDP. The rupiah exchange rate is projected to remain stable with a strengthening trend, supported by attractive yields, low inflation, and Indonesia's solid economic growth prospects, as well as Bank Indonesia's commitment to maintaining rupiah stability. Financial system stability is also maintained, supported by ample bank liquidity, high capital, and low credit risk.
Bank Indonesia will continue to strengthen its policy mix to maintain macroeconomic and financial system stability while promoting sustainable economic growth amid heightened global uncertainty. These efforts will be carried out in close synergy with the Financial System Stability Committee (KSSK) and in support of the Government's Asta Cita Program and continue to coordinate with the Government to strengthen policy communication to maintain market confidence.
Jakarta, 5 February 2026
Communication Department
Ramdan Denny Prakoso
Executive Director
