Fitch: Indonesia's Debt Market Predicted to Reach USD 800 Billion
Global rating agency Fitch Ratings predicts that Indonesia’s debt capital market (DCM) will grow rapidly to reach US$ 800 billion, or Rp 13.6 quadrillion (assuming an exchange rate of Rp 17,000 per US$), by the end of 2026. This growth is emerging amid macroeconomic and domestic risks.
In a non-rating analysis release published on Wednesday, 6 May 2026, Indonesia will remain one of the world’s largest sovereign sukuk markets. It will also be a major debt issuer among emerging market (EM) countries and the ASEAN region.
The total DCM market predicted to exceed US$ 800 billion is driven by sovereign debt issuance. Meanwhile, domestic corporate debt issuance is expected to increase. However, corporate debt defaults or restructurings are likely to continue.
Overall, Fitch assesses the main risks in the debt market as including domestic market volatility related to concerns over capital market governance, as well as the impact of the Iran war on emerging market sentiment and oil prices. These factors are seen to potentially affect issuance trends and contribute to capital outflows, and higher funding costs.
They will also exert pressure on the rupiah, which hit a record low in April. “Foreign investors are increasingly reducing their holdings of tradable domestic government debt, which fell below 13 percent in mid-April,” said Fitch’s Global Islamic Finance Head Bashar Al Natoor in an official statement on Wednesday, 6 April 2026.
This situation, according to Bashar, reflects risk aversion sentiment, rupiah depreciation, and rising yields. It also occurred after Fitch revised Indonesia’s Outlook to Negative in March.
Currently, Indonesia’s corporate debt market ranks fourth largest among emerging countries (excluding China) and the largest in the ASEAN region. Indonesian entities or companies became the world’s largest sukuk issuers by the end of the first quarter of 2026.
Total outstanding sukuk reached US$ 755 billion at the end of the first quarter of 2026, up 5 percent year-on-year, with a sukuk share of 17.5 percent, an increase from 16.8 percent in the first quarter of 2025.
Overall, in the first quarter of 2026, it reached around US$ 47 billion, down 6 percent from the same period the previous year. Meanwhile, liquidity of non-sovereign or corporate sukuk remains weak compared to sovereign sukuk.
The government is prioritising rupiah-denominated funding as part of the 2026–2030 debt strategy. The aim is to control debt risk from US dollar appreciation.
Fitch rates nearly all US dollar-denominated Indonesian sukuk issued by the state with a ‘BBB’ rating or investment grade with low default risk. Meanwhile, it rates 30 rupiah-denominated sukuk issued by non-government entities, with ratings ranging from ‘AAA’ to ’A-.