Moody's Flags Indonesia Risks as Subsidy Pressures Darken 2026 Fiscal Outlook
Updated
Updated · Bloomberg · Jul 21
Moody's Flags Indonesia Risks as Subsidy Pressures Darken 2026 Fiscal Outlook
3 articles · Updated · Bloomberg · Jul 21
Summary
Moody’s said risks to Indonesia have become “a little bit more negative” since it cut the sovereign outlook to negative in February, signaling persistent downside pressure.
Policy uncertainty and fiscal sustainability concerns are driving that view, with the ratings agency warning the balance of risks has worsened rather than stabilized.
The Iran war has added fresh strain by pushing subsidies up significantly, which Moody’s said is pressuring Indonesia’s fiscal outcome for this year and next year.
The warning suggests any improvement in Indonesia’s credit outlook will be harder to achieve as external shocks compound domestic policy and budget concerns.