Fitch Cuts Indonesia Outlook to Negative on Policy Uncertainty

Indonesia outlook negative Fitch decision reflects rising concerns about policy credibility and fiscal risks even as the rating agency affirmed the country’s BBB long-term foreign-currency rating.

Fitch said increasing policy uncertainty and more centralised decision-making could weaken fiscal guardrails, including the 3% of GDP deficit cap.

The agency also highlighted risks from a review of the State Finance Law in the government’s 2026 legislative priorities.

The Indonesia outlook negative Fitch move follows an MSCI warning and a Moody’s outlook revision to negative last month as scrutiny grows around President Prabowo Subianto’s spending plans including a USD20bn free meals programme amid softer tax revenue.