Fitch's BBB+ rating for M'sia reflects economic progress - PM

Fitch Ratings’ latest affirmation of Malaysia’s sovereign credit rating underscores its economic progress as envisioned under the Madani Economy framework, said Prime Minister Anwar Ibrahim.

“This is in particular to the Madani government’s commitment to implementing significant legislative and institutional reforms that have resulted in better policy clarity and effective economic management,” he said in a statement today.

Anwar, who is also finance minister, said Fitch has acknowledged that policy certainty has improved due to a more stable government.

This has been further demonstrated by various economic reforms, including strengthening state-owned enterprise governance and legislation via the Public Finance and Fiscal Responsibility Act 2023. 

This is in line with the International Monetary Fund’s views on the government’s timely reform agenda in enhancing productivity and inclusive growth, he said.

Yesterday, the rating agency affirmed Malaysia’s long-term foreign-currency Issuer Default Rating at “BBB+” with a stable outlook.

The Finance Ministry said key factors backing the outlook are broad-based and strong growth momentum, strengthened political stability, continuous current account surplus with strong foreign direct investments, and the narrowing fiscal deficit.

On economic expansion, the Finance Ministry said the government is confident about achieving robust growth in 2024, revised upwards to between 4.8 percent and 5.3 percent, from the initial 4 percent to 5 percent estimate.

“The government is committed to fiscal consolidation by gradually reducing the fiscal deficit, estimated at 4.3 percent of the gross domestic product in 2024 to 3.8 percent in 2025,” the statement said.

The Finance Ministry said Budget 2025 was formulated to support economic growth momentum, projected at between 4.5 percent and 5.5 percent.

The government will continue to enhance fiscal management under Budget 2025 by broadening revenue measures, using resources optimally, and pursuing subsidy rationalisation, particularly of RON95 petrol.

Institutional and structural reforms will also be prioritised in line with the Madani Economy framework to transform the economy, move up the value chain, promote high-skilled and high-income job creation, and enhance national productivity and competitiveness, the ministry added.

- Bernama

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