-- Indonesia will not see an immediate ratings downgrade by Fitch Ratings on going over its legal fiscal deficit limit of 3% if the change is justified, Reuters reported Friday citing George Xu, sovereign ratings director at Fitch.
The exception applies to temporary breaches - that is, a hypothetical increase for one year - in response to an economic fallout resulting from the Middle East conflict, the report said.
A higher deficit for over a year could, however, lead to a downgrade, according to the report.
The anticipated deficit for 2026 currently stands at 2.9% but could go up to 4% if the situation worsens, according to the report.
Fitch recently downgraded Indonesia's rating outlook to negative in March from stable previously.
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