Indonesia’s Finance Minister Defends Economic Policies Amidst Fitch Downgrade
Jakarta – Indonesia’s Finance Minister Purbaya Yudhi Sadewa has responded to Fitch Ratings’ recent downgrade of the country’s debt outlook from stable to negative, asserting the nation’s macroeconomic indicators remain sound. The downgrade has raised concerns about policy certainty and fiscal discipline, but Minister Purbaya remains confident in his administration’s economic strategies.
Fitch Ratings Downgrade and Government Response
On March 4, 2026, Fitch Ratings revised Indonesia’s outlook to negative, prompting a response from Minister Purbaya. He attributed the decision, in part, to the recent change in government and his own appointment as Finance Minister. He suggested the agency may be uncertain about the new administration’s ability to manage the country’s finances effectively Tempo.co.
Minister Purbaya emphasized that Indonesia’s debt-to-Gross Domestic Product (GDP) ratio remains within safe limits. He also highlighted the country’s strong economic growth, projecting a 5.11 percent expansion in 2025, positioning Indonesia among the highest in the G20 Tempo.co.
Unconventional Policies and Investor Skepticism
Purbaya’s approach to economic management has been described as unconventional, involving shifts in government funds to stimulate private sector credit. These policies have sparked debate and some investor skepticism Devdiscourse. Despite the concerns, Purbaya expresses confidence that his strategies will ultimately yield positive results.
Fiscal Performance and Future Plans
As of February 2026, Indonesia’s tax revenue reached Rp 245.1 trillion, a 30.4 percent increase year-on-year Tempo.co. The government intends to leverage all available economic drivers to reinforce the economy and address doubts from credit rating agencies.
Minister Purbaya plans to travel abroad in April 2026, coinciding with the International Monetary Fund (IMF) and World Bank meetings in Washington, D.C., to explain Indonesia’s fiscal policies and reassure international stakeholders Tempo.co. He initially stated he would only travel internationally once Indonesia achieved 6% economic growth, but has adjusted this plan to address the current situation Detik Finance.
Addressing Concerns About Structural Weaknesses
Purbaya acknowledged Fitch Ratings’ assessment of structural weaknesses within the State Budget (APBN). Though, he expressed surprise at the evaluation, noting that Indonesia’s debt-to-GDP and deficit-to-GDP ratios are favorable compared to countries like Vietnam Detik Finance.