JAKARTA: Indonesia won a credit rating upgrade from 惭辞辞诲测鈥檚 on Friday, with the agency lauding central bank and government policies for boosting confidence in Southeast Asia鈥檚 biggest economy.
The upgrade 鈥� after similar moves by other ratings agencies 鈥� comes at a good time for Indonesia鈥檚 president Joko Widodo. Boosting growth is at the center of what could be a tough re-election bid in next year鈥檚 presidential ballot.
Indonesia鈥檚 efforts at keeping budget deficits and inflation under control were behind 惭辞辞诲测鈥檚 boosting its rating to Baa2 from Baa3, and bumping its outlook to stable, it said.
A better credit rating tends to lower a country鈥檚 borrowing costs and can make it more attractive to investors.
鈥淭ogether with a build-up of financial buffers, prudent fiscal and monetary policy strengthens 惭辞辞诲测鈥檚 confidence that (Indonesia鈥檚) resilience and capacity to respond to shocks has improved,鈥� the ratings agency said.
Fitch echoed that sentiment in December when it also boosted Indonesia鈥檚 sovereign rating, saying economic reforms meant the country could better weather external shocks.
That came after Standard & Poor鈥檚 raised Indonesia鈥檚 credit rating from junk status to investment grade.
Monday鈥檚 upgrade comes after growth picked up slightly last year on the back of the central bank repeatedly slashing interest rates.
The economy expanded by 5.1 percent year-on-year in 2017, up from 5.0 percent growth in 2016, although it was still well below Widodo鈥檚 target of 7.0 percent.
Indonesia鈥檚 leader has launched an ambitious bid to upgrade the country鈥檚 creaking infrastructure and boost tax revenue, but the sprawling nation still struggles with endemic corruption, poverty and lackluster education standards.
Some analysts have cautioned that Indonesia鈥檚 commodities-driven economy could take a hit this year as prices for palm oil and coal are expected to be under pressure.