Rating agency Fitch Ratings has revised Indonesia's sovereign debt outlook from stable to negative—following Moody's similar move last month—while maintaining the BBB investment-grade rating. Officials including Coordinating Minister Airlangga Hartarto and Bank Indonesia emphasized ongoing economic strength amid fiscal pressures from programs like Free Nutritious Meals (MBG) and global tensions.
On March 5, 2026, Fitch Ratings revised Indonesia's sovereign debt outlook to negative from stable, while affirming the BBB rating. This follows Moody's negative outlook shift on February 5, 2026, amid shared concerns over fiscal space. Fitch cited increased social spending, including the Free Nutritious Meals (MBG) program (estimated at 1.3 percent of GDP), pushing the 2026 fiscal deficit to 2.9 percent of GDP, alongside Middle East geopolitical tensions.
Coordinating Minister for the Economy Airlangga Hartarto called MBG a long-term investment, citing World Bank and Rockefeller Foundation studies showing up to $7 in economic returns per $1 invested. "Itu (MBG) adalah sebuah investasi, dan banyak negara melakukan itu. Bahkan Amerika pun melakukan itu," he said in Tanah Abang, Central Jakarta. He noted the Middle East escalation's role and affirmed Indonesia's investment-grade status, pledging to study Fitch's warnings and boost revenues via the Cortex tax system.
Bank Indonesia (BI) Governor Perry Warjiyo reiterated that the revision does not signal weakening fundamentals, with solid growth (projected 4.9-5.7 percent for 2026), controlled inflation, and financial stability intact. This echoes BI's response to Moody's action.
