Fitch Cuts Indonesia's Debt Outlook, Minister: Danantara Is a New Agency

TEMPO.CO, Jakarta - Indonesia's sovereign wealth fund Danantara still needs time to prove itself, said Coordinating Minister for Economic Affairs Airlangga Hartarto, after global rating agency Fitch downgraded the country's debt outlook to negative. Fitch highlighted Danatara in its consideration to knock down Indonesia's outlook. 

"Danantara is a new sovereign wealth fund; not everyone is familiar with it and it needs a track record,"said Airlangga at Menara Batavia, Jakarta, on Thursday, March 5, 2026.

He mentioned that Danantara still needs to demonstrate its performance and prove its success. "The assessment from Fitch is noted," he added.

The international debt rating agency Fitch Ratings lowered Indonesia's debt outlook from stable to negative on Wednesday, March 4, 2026. Fitch cited concerns over the uncertainty of Indonesian government policies and the state budget deficit exceeding the target.

In its considerations, Fitch highlighted the mandate of the investment agency. Danantara plans to invest US$26 billion (1.7 percent of gross domestic product) this year in downstream projects targeted in the mineral, energy, food, and agriculture sectors.

"Uncertainty remains over whether the fund's mandate could expand over time to encompass quasi-fiscal activities through leveraged investments to support government policy priorities, which could reduce fiscal transparency and policy consistency and raise contingent liability risks to the sovereign," Fitch wrote.

Fitch's downgrade of Indonesia's debt outlook followed a similar decision by Moody's on February 5, 2026. Last month, Moody's lowered Indonesia's outlook from stable to negative. Based on its official statement, Moody's stated that the outlook change was driven by policy uncertainty that poses a risk to effectiveness and indicates weakened governance.

Read: Bank Indonesia Responds to Fitch's Downgrade of Indonesia's Debt Outlook

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