S&P affirms Indonesia's BBB rating, avoids downgrade

(ECNS) -- S&P Global Ratings affirmed Indonesia's sovereign credit rating at 'BBB' with a stable outlook on Monday, giving a reprieve to the country's embattled markets and fiscal credibility.

The agency cited recovering government revenue, rebounding export receipts from higher commodity prices, and fiscal discipline as key factors. S&P expects the government to maintain its 3% of GDP deficit ceiling as a policy anchor.

Indonesia's economy grew 5.6% in Q1 2026, though financial markets saw turmoil, with the stock index losing over 30% and the rupiah weakening about 7% against the dollar. S&P said the fiscal and external deterioration is "temporary" and could be mitigated by higher commodity prices and spending cuts.