'Stable' ratings by int'l agencies proves govt performance - PM

The scores given by international agencies S&P Global Ratings and Fitch Ratings are proof of the government’s responsible economic management, said Prime Minister Anwar Ibrahim.

“(They are a) testament to the government’s responsible economic management and how the Madani Economy reform agenda is delivering positive results,” he said.

Recently, Malaysia’s sovereign credit ratings were reaffirmed by S&P at A- and Fitch at BBB+, with both maintaining their “stable” outlook.

Anwar, who is also the finance minister, said the government is delivering continuous reforms across institutions to enhance ease of doing business and competitiveness.

He said the government is also continuing projects and policy reforms under the New Industrial Master Plan 2030, the National Energy Transition Roadmap, and the Mid-Term Review of the 12th Malaysia Plan.

“With a buoyant labour market and stronger trade and investment performance already pushing Q1 2024’s gross domestic growth beyond market expectations to 4.2 percent, the government is confident that the full-year 2024 economic growth will be within its official growth target range of four to five percent,” read a statement released by the Finance Ministry today.

“The reaffirmation by both agencies indicates international stakeholders’ continued confidence in the country’s robust and resilient growth, (despite) a challenging external environment and the escalation of geopolitical conflicts,” the ministry said.

It noted that S&P’s ratings on Malaysia “are underpinned by the country’s strong external position and monetary policy flexibility.

“In addition, its economic growth rate trend is faster than sovereigns of similar income level.

“S&P also highlighted that ‘Malaysia is going to be a key beneficiary in the global semiconductor industry boom period, which will be powered by AI computing needs’,” the statement read

GDP to rebound, fiscal deficit to drop

The ministry noted that “Fitch expects Malaysia’s GDP growth to rebound to 4.4 percent in 2024 and 4.5 percent in 2025, up from 3.6 percent in 2023, on resilient domestic demand and investments in the manufacturing sector.”

The Finance Ministry said the government is firmly committed to ensuring public finance sustainability by adhering to a consistent fiscal consolidation trajectory.

“The tapered fiscal deficit of 5.0 percent in 2023 is expected to narrow further to 4.3 percent in 2024.

“In the medium term, the government aims to achieve a budget deficit of three percent or less, as outlined in the Public Finance and Fiscal Responsibility Act 2023 enforced on Jan 1, 2024.

“This aligns with the fiscal target under the Madani Economy framework to achieve fiscal sustainability and enhance governance,” the ministry added.

- Bernama

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