Moody's: Indonesia stability improving

Moody's Investors Service said it commented that its positive outlook on the government of Indonesia's B1 local- and foreign-currency bond ratings reflects Indonesia's improving political and economic stability, diversified economy supporting stable growth and prudent fiscal policy. The outlook also reflects the government's improving debt trajectory and external payments position.

However, Indonesia's relatively high external debt levels, continued weakness in some areas of governance, Moody's said, and low levels of investment limiting long-term growth still pose some challenges to the economy.

Nevertheless, Indonesia's ratings could receive an uplift if the country's fiscal deficit remains low, thereby bringing down debt ratios further, the agency said. Progress on improving the investment climate, resulting in an increase in both foreign and domestic investment, would also support an upward move in the rating, Moody's added.

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