BERNAMA – S&P Global Ratings Reaffirms Malaysia’s Sovereign Credit Ratings, Stable Outlook

KUALA LUMPUR, Sept 20 (Bernama) — S&P Global Ratings (S&P) has reaffirmed Malaysia’s sovereign credit ratings at ‘A-‘ with a stable outlook, underscoring confidence in the country’s macroeconomic management despite global trade uncertainty, according to the Finance Ministry (MoF).

The rating affirmation was supported by Malaysia’s well-diversified economy, continued political stability, steady growth momentum, balanced external position, as well as narrowing fiscal deficits.

The MoF quoted the S&P as saying that the stability of Prime Minister Datuk Seri Anwar Ibrahim’s administration has resulted in a more favourable policy-making environment, enabling economic reforms and fiscal consolidation to gain traction. 

“The stable outlook reflects our expectation that Malaysia’s growth momentum and prevailing policy environment will allow modest improvements in fiscal performance over the next two to three years,” the credit ratings agency said.

MoF said S&P also credited Malaysia’s rating affirmation to the country’s consistently strong economic growth, high degree of monetary policy flexibility and balanced external position that is supported by moderate current account surpluses and a large export base. 

Additionally, S&P said Malaysia’s economy is well-diversified and resilient in times of adversity, while acknowledging the government’s commitment to fiscal consolidation through subsidy reforms and revenue enhancement measures.

Meanwhile, Anwar, who is also the Finance Minister, said that the MADANI government has focused on improving the people’s quality of life (Raising the Floor) and economic reforms (Raising the Ceiling) while ensuring responsible fiscal management. 

“While external conditions remain uncertain, we will continue with our resolve to pursue reforms that will lift Malaysia to new heights,” he said. 

According to the MoF, Malaysia’s economy expanded 4.4 per cent for the first half of the year, with growth being broad-based.

Household spending remained resilient, supported by favourable labour market conditions, subdued inflation, vibrant domestic tourism, and ongoing government measures to sustain consumer purchasing power. 

“Strong private and public sector activities through higher investment in the manufacturing and services sectors, as well as ongoing infrastructure developments, are set to keep the economy on course amid persistent global uncertainties. 

“Overall, Malaysia’s gross domestic product (GDP) is projected to expand between 4.0 per cent and 4.8 per cent in 2025,” it said.

Furthermore, the ministry said Malaysia’s stable external position continues to be a rating strength, as the country has consistently recorded current account surpluses for more than two decades. 

The MoF said the S&P has forecast the current account surplus to stabilise at around 2.1 per cent of the GDP over the next three years, driven by continued strong demand for Malaysian manufacturing exports. 

This indicates that Malaysia has sufficient reserve coverage, while its deep capital markets are expected to support financial stability, the ministry said.

According to the MoF, the government remains vigilant in managing dynamics around global economic conditions, especially the developments in trade policies, while ensuring flexible and agile policy prescriptions.

“Going forward, the government will continue to push through the comprehensive reform agenda outlined under the MADANI Economy framework for higher growth, enhanced economic resilience and fiscal sustainability. 

“Moreover, the Public Finance and Fiscal Responsibility Act 2023 will ensure fiscal consolidation remains on track while providing ample support to sustain economic growth,” it said.

Budget 2026, scheduled to be announced next month, will be the first to anchor the implementation of the 13th Malaysia Plan (13MP) 2026-2030.

— BERNAMA

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