S&P Global Ratings has raised concerns over the Indonesian government’s plan to centralize commodity exports under a new state-led agency. According to the rating agency, this move could suppress export volumes, diminish state revenue, and negatively impact the nation’s balance of payments.
In a statement issued Thursday (May 21), S&P warned that the centralization policy introduces significant uncertainty regarding economic prospects and export-related foreign exchange inflows. The agency further cautioned that such a move risks disrupting the seamless flow of commodity trading, noting that these factors heighten the downside risks for Indonesia’s sovereign credit rating.
This skepticism from S&P arrives amid severe volatility in the domestic stock market, triggered by the government’s announcement to establish a specialized natural resource export entity, Danantara Sumberdaya Indonesia.
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Finance Minister Purbaya Yudhi Sadewa attributed the market downturn to a misunderstanding of the agency’s long-term objectives. “Investors may not fully grasp the actual impact of this policy yet. When faced with uncertainty, the market often retreats, leading to a sell-off,” Purbaya explained during a meeting at the Coordinating Ministry for Economic Affairs on Thursday.
President Prabowo Subianto has previously stated that the export agency is intended to strengthen oversight of natural resource shipments, aiming to curb practices such as underinvoicing, transfer pricing, and the flight of export earnings. The government remains confident that these measures will optimize tax collection and state revenue from the natural resource sector.
Purbaya argued that once the market fully digests the policy, the Indonesia Composite Index (IHSG) is likely to rebound. He suggested that the centralization of exports could actually improve the profitability of publicly listed companies in the natural resource sector. “This should eventually enhance the valuation of companies on the stock exchange. As the market begins to understand the benefits, we expect a significant upward trend,” he added.
To implement this single-gate export policy, the government has formed PT Danantara Sumberdaya Indonesia under the Danantara (Daya Anagata Nusantara) Investment Management Agency. Pandu Sjahrir, Chief Investment Officer of Danantara Indonesia, echoed the call for patience, stating that the organization is monitoring market conditions and remains optimistic about future performance.
IHSG Drops to the 6,000 Level
The pressure on the stock market has intensified as the IHSG retreated to the 6,000 level, a position not seen since the height of the Covid-19 pandemic in 2021. Year-to-date, the index has declined by 28.94%, with a 19.09% drop recorded over the past month alone.
This decline is particularly stark considering the index reached an all-time high of 9,134 on January 20, 2026, when market capitalization peaked at IDR 16,590 trillion. By May 2026, however, the total market capitalization of the Indonesia Stock Exchange had shrunk to IDR 10,642 trillion.
As of Thursday’s close, the IHSG fell by 3.54%, or 223.56 points, ending the trading session at 6,094. According to Indonesia Stock Exchange data, the trading volume reached 35.54 billion shares with a frequency of 2.14 million transactions, resulting in a total transaction value of IDR 18.28 trillion.
Summary
S&P Global Ratings has cautioned that Indonesia’s plan to centralize commodity exports under the new state-led agency, PT Danantara Sumberdaya Indonesia, poses risks to the nation’s sovereign credit rating. The agency warns that this policy could reduce export volumes, lower state revenue, and negatively affect the balance of payments. These concerns have contributed to significant volatility in the domestic stock market, where the Indonesia Composite Index (IHSG) has recently declined to the 6,000 level.
The Indonesian government maintains that the new entity is designed to improve oversight of natural resource shipments and curb practices like underinvoicing and transfer pricing. Finance officials argue that the current market downturn stems from a misunderstanding of the policy’s long-term objectives and anticipate a rebound as investor confidence grows. Despite this, the index has experienced a sharp year-to-date decline, reflecting widespread uncertainty regarding the impact of the centralized export model.
