Fitch Ratings Affirms Malaysia Sovereign Credit Rating, Outlook Stable
Fitch also expects services to continue to be boosted by resilient domestic demand, contained inflation and the recovery in tourism-related sectors from the re-opening of China.
The Government welcomes Fitch Rating’s affirmation of Malaysia’s sovereign credit ratings at BBB+ with a “Stable” outlook for 2023, says Prime Minister Anwar Ibrahim in a media statement today.
"The affirmation reflects confidence in this Government’s administration and the strength of Malaysia’s economic recovery as well as the country’s resilience amidst an uncertain and highly challenging global landscape," the media release says.
On the other hand, Fitch explaines, “Malaysia’s ratings balance a diversified economy with strong medium-term growth prospects against high public debt, a low revenue base relative to the operating expenditures.”
Azam Saham
Strong Growth Outlook
Fitch expects Malaysia’s GDP to moderate to 4.0% in 2023 and 4.8% in 2024, from a strong growth of 8.7% in 2022 amid easing of COVID-19 restrictions and as the Government continues to provide relief measures and support towards rapid and broad recovery of the economy.
Fitch also expects services to continue to be boosted by resilient domestic demand, contained inflation and the recovery in tourism-related sectors from the re-opening of China.
The medium-term growth trend is expected to remain robust between 4.0 - 5.0%. Meanwhile, Fitch anticipates that the manufacturing and exports are likely to face headwinds from weaker global demand for electronics and commodities.
Gradual Fiscal Consolidation
Fitch assumes deficit reductions will be gradual and expects fiscal deficit to decline to an average of around 4.5% of GDP in 2023 – 2025, citing upside risks including greater expenditure rationalisation and substantial revenue mobilisation measures.
Moving forward, the Government is determined to ensure that the nation’s fiscal position continues to strengthen through gradual consolidation of the fiscal deficit while balancing the need to support economic growth during these challenging times globally.
Through Belanjawan 2023, which will be tabled on 24 February 2023, the Government will continue to intensify reform efforts to drive the country’s economic recovery, boost investment and improve public infrastructure.
Continued emphasis will also be placed on initiatives to control inflationary pressures and ease the rakyat’s burden from the high cost of living.
Belanjawan 2023 will also focus on strengthening the country’s finances and governance, to support the Government’s commitment to sustain the economic recovery momentum towards improving the well-being of the rakyat in line with Belanjawan 2023’s theme of “Building Malaysia MADANI”.
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