S&P Warns Indonesia of Downgrade Risk as $46.1 Billion Debt and Fiscal Strains Mount
Updated
Updated · DW (English) · Jul 16
S&P Warns Indonesia of Downgrade Risk as $46.1 Billion Debt and Fiscal Strains Mount
3 articles · Updated · DW (English) · Jul 16
Summary
S&P Global Ratings said on July 9 that Indonesia could face a downgrade, citing market-transparency concerns that add to mounting worries over the country’s fiscal credibility.
Fuel-subsidy costs surged after the Strait of Hormuz closure, forcing policymakers to find at least $6 billion more on top of a roughly $22 billion budgeted subsidy bill.
The rupiah has fallen 8% to near 18,000 per dollar, Jakarta stocks have dropped by a third, and foreign funds have sold a net $3.9 billion of equities this year.
Prabowo Subianto’s spending push has sharpened investor concern because about a quarter of 2026 tax revenue is expected to go to interest payments, while 834 trillion rupiah in government debt matures this year.
Moody’s and Fitch already cut Indonesia’s outlook to negative, and a broader downgrade could push the G20 economy off many emerging-market investors’ radar, reviving unease last seen around the 1997-98 crisis.