- Indonesia has suffered from a sharper increase in bond yields compared to some other economies since the US election, underscoring the growing influence of bond vigilantes demanding higher returns on bonds.
- Indonesia faces a similar challenge to many European economies, as weakening domestic growth momentum and military spending hinder progress on fiscal consolidation.
- The increasingly active bond vigilantes could complicate the government’s efforts to issue more debt and keep borrowing costs at manageable levels unless the government manage to meaningfully improve its spending efficiency.
