S&P lowers Indonesia to stable

Standard & Poor's said it revised the outlook on the Republic of Indonesia to stable from positive.

The agency also said it affirmed the BB+ long-term and B short-term sovereign credit ratings and axBBB+/axA-2 Asean regional scale rating on Indonesia.

The republic's transfer and convertibility risk assessment on Indonesia is unchanged at BBB-. S&P also affirmed the BB+ rating on Indonesia's outstanding senior unsecured notes.

The stalling of reform momentum and a weaker external profile diminished the potential for a rating upgrade over the next 12 months, the agency said.

The sovereign credit rating on Indonesia reflects the economy's low per capita income, still-developing structural and institutional foundations, weak policy environment and rising external leverage, S&P said.

These constraints are weighed against the country's well-entrenched cautious fiscal management and resultant modest general government debt and interest burden, which make for a favorable debt profile, the agency said.

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