Moody's: Good balance for Indonesia

In its annual report on Indonesia, Moody's Investors Service said its Ba3 government bond ratings and stable outlook balance declining government and external debt burdens, better economic policy performance and an improved political environment against a diminished, but lingering vulnerability to external shocks, natural disasters and governance issues.

The government bond ratings were upgraded from B1 in October. The upgrade reflects a track record that, along with real effective appreciation of the Indonesian rupiah, has been instrumental in improving the government's debt burden, Moody's said. The ratings also reflect fundamental improvements in the country's external position that have heightened its resilience to balance of payments shocks.

Foremost among challenges will be the continued maintenance of price stability amidst high energy and food prices, volatile external markets and an uptrend in the domestic economic cycle, Moody's said.

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