Indonesia's economy is under growing strain as President Prabowo Subianto's policies erode investor confidence, compounding pressures from inflation, fuel shortages, the war in Iran and US tariffs. MSCI warned it could drop Indonesia from its benchmark indexes, sending stocks down more than 11% in one day, their biggest drop since the 1998 Asian financial crisis, with a further 3.6% fall on Monday. The middle class has shrunk about 19% from its peak and youth unemployment hovers around 17%, leading experts to warn of the country's most combustible moment since 1998. Investor concerns also center on a free-meal programme for over 80 million students that could cost up to US$30 billion a year, pressure on the rupiah and questions over government transparency. Because Indonesia is the world's largest producer of palm oil and nickel, an economic crash could disrupt global supply and push up food, consumer goods and energy prices.
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Original headline: A ticking time bomb : An economic crisis looms in Indonesia
Read the original on nzherald.co.nz ↗
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IndonesiaMSCIinflationcommodities
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Related tickers and likely impact
VNINDEX
• NeutralRelevance: low
| Market | Vietnam stocks |
|---|---|
| Close on 10/19/2026 | 1,689.84 |
| Change that session | -0.94% |
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