Indonesia credit rating upgraded by Moody’s

JAKARTA, Indonesia — Moody’s has upgraded Indonesia’s credit rating due to increased confidence the government will maintain its recent track record of responsibly managing the national budget and interest rate policy.

In a boost for President Joko “Jokowi” Widodo’s ambitious plans to carpet Indonesia with modern roads, ports, rail and airports, Moody’s Investors Service said state-owned enterprises taking on more debt to fund those projects does not pose a “significant risk.”

The upgrade raised Indonesia’s sovereign credit rating to Baa2 from the lowest investment grade rating.

A higher credit rating can reduce the cost of borrowing overseas and encourage foreign investment.

Indonesia is Southeast Asia’s largest economy but still struggles with high levels of childhood malnutrition, low educational standards and widespread corruption.