February 10, 2026 | 06:44 pm
TEMPO.CO, Jakarta - The Ministry of Finance is committed to improving fiscal governance and economic policies following Moody's decision to downgrade Indonesia's credit outlook from stable to negative. According to Deputy Minister of Finance Juda Agung, the measures will not compromise fiscal discipline, especially concerning the commitment to keep the budget deficit under control.
"We must make improvements across all aspects, including governance, policy governance, and other risks," said Juda Agung after attending the Economic Outlook 2026 event at Hotel Kempinski, Jakarta, on Tuesday, February 10, 2026.
The deputy minister ensured that despite receiving feedback from international rating agencies, the government remains steadfast in adhering to the maximum budget deficit of 3 percent of the Gross Domestic Product (GDP) as mandated in Law Number 17 of 2003 concerning State Finance. For the 2026 State Budget, the government has even set a lower deficit target of 2.68 percent.
Juda Agung stated that the budget deficit commitment is non-negotiable for the Indonesian government. "Oh yes, the 3 percent rate is non-negotiable," he said.
Juda Agung added that the Moody's report will be used as an evaluation material to face assessments from other rating agencies. Fitch Ratings is scheduled to announce its assessment of Indonesia on February 23, 2026, followed by Standard & Poor's (S&P).
"That's what I call 'lesson learned' from Moody's yesterday," he said.
Earlier, Moody's downgraded Indonesia's government debt outlook from stable to negative, although it maintained the credit rating at Baa2 level, one level above the minimum investment grade. In its report, Moody's highlighted three main factors, namely economic governance, fiscal risks, and the existence of sovereign wealth fund Danantara.
Moody's believes that increasing policy uncertainty has the potential to weaken the effectiveness of governance. The rating agency also highlighted fiscal pressures due to increased state expenditure amid limited revenue, especially from the expansion of social programs, such as nutritious free meals (MBG) and public housing.
In addition, Danantara has been seen to add policy and financing uncertainty. With around US$900 billion in assets, Moody's believes that this new institution has the potential to influence future investment priorities and fiscal policies.
Anastasya Lavenia Yudi contributed to the writing of this article.
Read: Danantara Urged to Clarify Indonesia's Fiscal Policy to Moody's
Click here to get the latest news updates from Tempo on Google News
Meet 'The Baroness', the World's Longest Wild Snake from Indonesia
1 jam lalu
Discover Ibu Baron or the Baroness, a reticulated python from Indonesia's Sulawesi that officially became the world's longest wild snake.
Indonesia Investigates Claims of 58 Million Student Data Breach
2 jam lalu
Coordinating Minister Pratikno said there is no indication of a data breach involving 58 million Indonesian students, despite online claims.
FFI Awaits Progress on Indonesia's 2028 Futsal World Cup Bid
3 jam lalu
FFI Chair Michael Victor Sianipar awaits updates on Indonesia's bid for the 2028 Futsal World Cup following discussions between PSSI and FIFA.
Prabowo Meets 22 Business Leaders in Hambalang, Urges Job Creation
8 jam lalu
Indonesian President Prabowo Subianto met with 22 businesspeople at his private residence in Hambalang, Bogor, West Java, on Monday evening, February
Prabowo's MUI Building Plan Seen as Political Co-optation
10 jam lalu
A lecturer in Constitutional Law criticizes the Indonesian government's plan to build 40-story office building for the Indonesian Ulema Council (MUI)
Minister: 41 Percent of Indonesia's Health Insurance Aid Misses Target
11 jam lalu
The Indonesian government has uncovered serious problems in the implementation of the National Health Insurance Premium Assistance Recipient program.
Indonesian Tourists Arrival Ranked Second in Singapore as China Takes Top Spot
19 jam lalu
Total international tourist arrivals in Singapore throughout 2025 reached 16.9 million, with 2.4 million tourists from Indonesia.
Six-Year-Old Indonesian Girl Killed in Singapore Car Accident
20 jam lalu
A six-year-old girl from Indonesia was killed after she and her mother were hit by a car in Singapore.
Indonesia to Discuss Two-State Solution at D-8 Summit
21 jam lalu
Indonesia will host the Developing Eight (D-8) Summit this year. The meeting will discuss the two-state solution for Palestine and Israel.
Indonesia Readies 8,000 Peacekeepers After Joining Trump's Board of Peace
23 jam lalu
The peacekeeping forces' preparation aligns with Indonesian President Prabowo Subianto's decision to join the Trump-backed Board of Peace.
