A filepic of an aerial view of the city of Kuching.
SINGAPORE: Standard & Poor’s Global Ratings’ said its ratings on Sarawak (A-/Stable/--; axAA/--) are not affected by the results of the Sarawak 2016 elections.
Barisan Nasional (BN) has retained its hold in Sarawak by winning 72 out of the 82 seats. Recent corruption allegations in relation to 1Malaysia Development Bhd had raised the possibility that the opposition could make further inroads. Instead, BN increased its vote share and number of parliamentary seats on the back of the popularity of new chief minister Tan Sri Adenan Satem.
“We expect the Sarawak government to maintain its policy direction to promote sustainable economic growth and prudent public finances. We also view the election results as a further strengthening of the state’s relationship with the federal government,” S&P said in a statement.
The rating agency said the ratings on Sarawak reflected its view of the state’s very strong budgetary performance and exceptional liquidity. This is against the backdrop of an evolving but balanced institutional framework.
“The state’s very high debt burden, high contingent liabilities, and low-income economy relative to international benchmarks for GDP per capita temper these strengths. Our view of Sarawak’s satisfactory financial management and average budgetary flexibility are neutral to the ratings,” S&P said.
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