Indonesia credit rating upgraded by Moody's

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)
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)
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)

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.

You may also interested in

Indonesia president urges military to stay out of...

Oct 5, 2017

Indonesia's president has urged the military to stay out of politics and remain loyal to the...

The Latest: Indonesia says 100,000 should leave...

Nov 27, 2017

Indonesia's Disaster Mitigation Agency says as many as 100,000 villagers need to leave the expanded...

The Latest: Tourists look for flight info or...

Nov 28, 2017

Thousands of tourists remain stuck on Indonesia's island of Bali after its airport was closed for a...

Indonesia politician's graft trial delayed by...

Dec 13, 2017

A top Indonesian politician accused of involvement in one of the country's biggest corruption...

Indonesia hard-line Muslims protest ban on...

Jan 12, 2018

Muslim hard-liners have protested in Indonesia's capital against Facebook's blocking of accounts...