Indonesia credit rating upgraded by Moody's

Cars line up in a traffic congestion next to Light Rapid Transit (LRT) in construction site, right, in Jakarta, Indonesia April 13, 2018. Moody's upgraded Indonesia's credit rating on Friday due to increased confidence the government will maintain its recent track record of responsibly managing the national budget and interest rate policy. (AP Photo/Achmad Ibrahim)
An Indonesian laborer works at Light Rail Transit (LRT) construction site in Jakarta,Indonesia, Friday, April 13, 2018. Moody's upgraded Indonesia's credit rating on Friday due to increased confidence the government will maintain its recent track record of responsibly managing the national budget and interest rate policy. (AP Photo/Achmad Ibrahim)
Indonesian laborers work at Light Rail Transit (LRT) construction site in Jakarta,Indonesia, Friday, April 13, 2018. Moody's upgraded Indonesia's credit rating on Friday due to increased confidence the government will maintain its recent track record of responsibly managing the national budget and interest rate policy. (AP Photo/Achmad Ibrahim)
Indonesian laborers work at Light Rail Transit (LRT) construction site in Jakarta, Indonesia, Friday, April 13, 2018. Moody's upgraded Indonesia's credit rating on Friday due to increased confidence the government will maintain its recent track record of responsibly managing the national budget and interest rate policy. (AP Photo/Achmad Ibrahim)

JAKARTA, Indonesia — Moody's upgraded Indonesia's credit rating on Friday 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.

Citing improved economic management and the central bank's focus on controlling inflation, Moody's said "these policies and larger financial reserves are strengthening Indonesia's capacity to respond to shocks."

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

Indonesia, with a population of more than 260 million, is Southeast Asia's largest economy but still struggles with high levels of childhood malnutrition, low educational standards and widespread corruption.

Must Read

China promises cooperation on steel at global summit

Sep 5, 2016

China promises cooperation on steel at global summit amid pressure for trade curbs

Obama and Putin meet in China amid struggle for Syria deal

Sep 5, 2016

US, Russia struggle to keep alive negotiations to end the bloodshed between U.S.-backed rebels

May says Britain still inspires confidence post-Brexit

Sep 5, 2016

After meeting with other world leaders during the G-20 summit, British Prime Minister Theresa May...

Asian markets lower after Wall Street decline

Sep 15, 2016

Asian stock markets were mostly lower Thursday following Wall Street's decline in light trading...

Winds may finally clear 'scary' pollution from China's skies

Dec 21, 2016

The dense smog that has smothered much of China for five days may soon clear, giving relief to...