April 15, 2026 | 09:20 pm
TEMPO.CO, Jakarta - S&P Global Ratings assesses that Indonesia is more vulnerable to weakening credit metrics compared to other Southeast Asian countries amid the turmoil in the Middle East. Indonesia's debt is rated BBB or stable.
S&P Global highlights the fiscal risks due to the increase in energy prices. "Higher energy prices increase budgetary subsidy payments, weighing on deficits," wrote S&P Global in its report on Wednesday, April 15, 2026.
In its analysis, S&P Global predicts energy supply disruption due to the closure of the Strait of Hormuz could last for months, even though tensions could ease during April. This is because with the damaged energy infrastructure in the Middle East, it may take time for oil and gas production levels to normalize.
Additionally, S&P states that government interest payments could rise if a spike in inflation triggers an increase in market interest rates. The more expensive oil product imports are also expected to widen the current account deficit.
Meanwhile, S&P believes that higher commodity prices could help to curb Indonesia's external credit matrix deterioration. S&P states that Indonesia's exports are expected to grow this year, supported by the sales of palm oil, nickel, vehicles, and solar panels. However, the growth momentum is dampened by the declining sales of energy products, such as coal, crude oil, and natural gas.
S&P also views that broadly higher commodity prices could help to alleviate pressure on Indonesia's debt rating. "This could help to turn around some of the worsening trend in the country's credit metrics once the situation normalizes," said S&P.
Read: ADB: Asia-Pacific Growth Slows to 5.1% as Middle East War Rages
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