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View all search resultsS&P flags rising fiscal risks from debt costs
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State Secretary Prasetyo Hadi talks to journalists on July 25, 2025, during a press briefing at the Presidential Palace in Jakarta. (Antara/Galih Pradipta)
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&P Global Ratings warned that escalating debt-servicing costs are increasing the risks to Indonesia’s sovereign credit profile and could trigger a negative rating action if sustained.
In a webinar on the Asia-Pacific region on Thursday, S&P sovereign analyst Rain Yin revealed that interest payments “very likely” breached the agency’s key threshold of 15 percent of government revenue last year, as reported by Bloomberg.
While S&P maintained a stable outlook on Indonesia’s BBB investment-grade rating, Yin cautioned that a sustained breach would prompt a “more negative view.”
The warning from S&P comes just weeks after Moody’s Ratings shifted its outlook on Indonesia to negative from stable, citing weakening governance and mounting fiscal pressures under President Prabowo Subianto's administration.
Indonesia’s economy grew 5.11 percent in 2025, slightly higher than the 5.03 percent achieved in 2024, but still below the government’s 5.2 percent target.
Though the figure signaled resilience, it was quickly overshadowed by Moody’s decision to lower its outlook for Indonesia from stable to negative, citing governance concerns and policy uncertainty.
Read also: Analysis: Moody’s outlook downshift sends negative signals despite resilience
