Indonesia's debt capital market could come to $800 billion outstanding by end-2026, supporting the country's status as a major emerging market debt issuer and one of the world's largest sukuk markets, Fitch Ratings said in a recent release.
The country's debt market is mainly sovereign-linked, while onshore corporate issuance will likely grow, Fitch said.
However, pressure from domestic market volatility given governance worries and the impact of the Iran war on oil prices could shape issuance dynamics , the rating agency said.
Foreign investors' holdings of tradeable domestic government securities declined to below 13% by mid-April, entailing a risk-off sentiment, Fitch's global head of Islamic finance Bashar Al Natoor said.
The country's debt capital market was at $755 billion outstanding at the end of the first quarter, growing 5% year over year and with sukuk having a 17.5% share, Fitch said.
Debt issuance in the quarter reached about $47 billion, down 6% annually due to macroeconomic volatility and a large rise in borrowing from the previous quarter, according to Fitch.