Prabowo Debt Plan Stirs Isia Rating Worries; Isia has a 0.5 percent chance of defaulting within a year, more than ten times higher than Msia or the Philippines, even though its liability ratio is half that of its Southeast Asian peers
June 18, 2014 Leave a comment
Prabowo Debt Plan Stirs Indonesia Rating Worries: Asean Credit
Presidential contender Prabowo Subianto’s pledge to spur economic growth by doubling the rate of borrowing risks raising Indonesia’s chance of default.
Prabowo sees Southeast Asia’s largest economy as “underleveraged” and would raise its debt-to-gross domestic product ratio toward 50 percent, compared with the current 24 percent, Hashim Djojohadikusumo, his brother and economic adviser, said in a June 6 seminar in Jakarta. The plan includes raising $300 billion from the capital markets over five years to achieve a 10 percent growth rate, Hashim said.
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