MALAYSIA’S economic resilience, improving fiscal position and diversified investment base have secured another reaffirmation of its A-sovereign credit rating from S&P Global Ratings, with the agency maintaining a stable outlook.
The rating assessment is significant for Malaysia as the country seeks to sustain growth while reducing its fiscal deficit and attracting higher-quality investment amid a challenging global environment.
S&P expects the Malaysian economy to expand 5.5% in 2026, following growth of 5.2% in 2025 and 5.7% in the first half of this year.
It forecasts average annual growth of 5% between 2026 and 2029, while estimating Malaysia’s 10-year weighted-average real GDP per capita growth at 3.7%, above the global median for countries at similar income levels.
The stable outlook reflects S&P’s expectation that Malaysia’s growth momentum and policy environment will support steady fiscal performance over the next two to three years.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said the assessment showed that reforms under the Ekonomi MADANI framework were being pursued alongside efforts to strengthen the country’s fiscal position.
“Since the launch of Ekonomi MADANI, we have pursued reforms gradually and in sequence, balancing the need to strengthen our fiscal foundations with the imperative to sustain growth and protect the rakyat from external volatilty,” he said in a statement released by the Ministry of Finance (MOF) on Tuesday.
“S&P’s assessment that Malaysia’s 10-year weighted-average real GDP per capita growth remains above the global median for peers at similar income levels is encouraging. It shows that growth per person has remained strong, while we have continued to protect the rakyat from the impact of external inflationary pressures despite an increasingly challenging global environment,” he added.
S&P identified stronger electrical and electronics (E&E) and semiconductor shipments linked to the global artificial intelligence investment cycle, higher energy exports and resilient household consumption as factors supporting Malaysia’s current growth momentum.
The agency also pointed to Malaysia’s established E&E ecosystem and policy initiatives under Ekonomi MADANI and the New Industrial Master Plan 2030 as potential drivers of longer-term growth.
The country’s expanding data-centre industry is another major investment driver, with S&P estimating cumulative data-centre investment at RM386 billion between 2021 and mid-2026.
On fiscal management, S&P noted that Malaysia’s fiscal deficit had narrowed from 6.4% of GDP in 2021 to 3.7% in 2025, reflecting continued efforts to strengthen public finances.
The Public Finance and Fiscal Responsibility Act 2023 (Act 850) is also expected to provide a framework for stronger fiscal governance, transparency and risk management, with S&P noting its bipartisan support.
Malaysia’s external position provides another buffer, supported by a large and diversified export base and a track record of current account surpluses spanning more than two decades.
S&P expects the current account surplus to remain at about 1.8% of GDP over the next three years.
It also assessed Bank Negara Malaysia as having significant independence and strong monetary policy credibility, with inflation expectations remaining well anchored.
For Malaysia, the assessment comes as the government prepares to implement further reforms under the Thirteenth Malaysia Plan (13MP) 2026-2030 and table Budget 2027 on Oct 9.
The government has said its focus will remain on fiscal sustainability, productivity and competitiveness, while ensuring economic growth translates into higher incomes and better opportunities.
“Our task now is to ensure that stronger growth translates more meaningfully into higher incomes, better opportunities and improved living standards for the rakyat. Belanjawan 2027, to be tabled on 9 October 2026, will build on these reforms with further measures to achieve that objective,” said Anwar. - September 29, 2026
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