S&P ups Indonesia from junk

S&P said it raised the long-term sovereign credit ratings on the Republic of Indonesia to BBB- from BB+.

The outlook is stable.

The agency also upgraded the short-term sovereign credit ratings on Indonesia to A-3 from B and the Asean regional scale long-term rating to axA- from axBBB+. The short-term Asean regional scale rating was affirmed at axA-2.

S&P said it raised the ratings to reflect its assessment of reduced risks to Indonesia's fiscal metrics. The agency believes the government's increased focus on realistic budgeting has reduced the likelihood that a shortfall in future revenue would widen the general government deficit significantly beyond what S&P expects now.

This also reduces the risk of a rising net general government debt ratio and debt servicing burden.

Instead, the agency said it now anticipates that net debt will remain at the moderate levels of below 30% of GDP.

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