{
  "id": 27151,
  "title": "Why Indonesia's economy is under pressure",
  "url": "https://urgent.news/2026/07/15/why-indonesias-economy-is-under-pressure",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-07-15T08:13:00.000Z",
  "source": {
    "name": "DW Business",
    "slug": "dw-business",
    "url": "https://www.dw.com/en/why-indonesia-s-economy-is-under-pressure/a-77847180?maca=en-rss-en-bus-2091-rdf"
  },
  "original_language": "en",
  "account": "Indonesia, the world's largest economy in Southeast Asia, is facing economic pressure due to several factors. The country, which saw steady annual growth of 5% since the pandemic, now relies heavily on imported fuel, despite having its own oil reserves, causing a significant increase in fuel subsidies. Policymakers are projected to need an additional $6 billion or more to maintain stable prices. This financial strain has led to a sharp decline in the national currency, the rupiah, which plummeted to record lows near 18,000 to the dollar. The Jakarta stock market, once on track for a record high, fell by a third, marking the worst-performing market of the year.\n\nForeign investors have responded negatively, pulling billions out of Indonesian assets, leading to a net $3.9 billion sell-off this year, the largest since the 1997-98 Asian Financial Crisis. The surge in energy costs, combined with President Prabowo Subianto's ambitious spending promises, has spooked the markets. While Prabowo has received strong political and public support for his plans to raise economic growth to 8% through trillions of rupiah in spending on housing, education, and health, experts warn of the potential strain on Indonesia's already tight fiscal space.\n\nIndonesia's creditworthiness has been questioned by international ratings agencies, with Moody's, Fitch, and S&P Global Ratings warning of potential downgrades due to risks associated with Prabowo's rapid spending. This downgrade would have severe consequences for Indonesia, potentially pushing it off the radar of investors specializing in emerging economies. The country, which had previously learned the importance of fiscal prudence after the Asian financial crisis, now faces the risk of a free fall, despite its relatively low debt-to-GDP ratio.",
  "summary": "Southeast Asia's largest economy risks losing its emerging-market status as President Prabowo Subianto's spending plans rattle markets. Can he deliver growth?",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}