FITCH Ratings’ latest affirmation on Malaysia’s sovereign credit rating underscores its economic progress as envisioned under the MADANI Economy framework, said Prime Minister Datuk Seri Anwar Ibrahim.
“This is in particular to the MADANI government's commitment to implement significant legislative and institutional reforms that have resulted in better policy clarity and effective economic management,” he said in a statement as reported by Bernama.
Anwar, who is also the Finance Minister, said Fitch has acknowledged that policy certainty has improved as a result of a more stable government.
This has been further demonstrated by the introduction of various economic reforms, including the strengthening of state-owned enterprise governance and legislation, including 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 (IDR) at 'BBB+' with a stable outlook.
The Ministry of Finance (MoF) said key rating drivers which support the reaffirmation are, namely, 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, MoF said the government is confident about achieving robust growth in 2024, revised upwards to between 4.8 per cent and 5.3 per cent, from the initial 4.0 per cent to 5.0 per cent estimate.
“The government is committed to fiscal consolidation, by gradually reducing the fiscal deficit, estimated at 4.3 per cent of the gross domestic product (GDP) in 2024 to 3.8 per cent in 2025,” the statement said.
MoF said Budget 2025 was formulated to support economic growth momentum, projected at between 4.5 per cent and 5.5 per cent.
The government will continue to enhance fiscal management under Budget 2025, via broadening revenue measures, using resources optimally, and pursuing subsidy rationalisation, particularly of RON95.
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, as well as enhance national productivity and competitiveness, the ministry added. — December 17, 2024
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