KUALA LUMPUR: Moody's Investors Service has affirmed the government of Malaysia's local and foreign currency issuer and senior unsecured debt ratings at A3. The outlook remains stable.
The rating agency said the affirmation of Malaysia's A3 rating recognises that Malaysia's fiscal strength has weakened.
“Government debt will stay high for longer and the government's fiscal policy choices will narrow the revenue base and reduce fiscal flexibility further,” it said in a statement on Friday.
However, on a positive note, Moody's robust growth potential, notwithstanding a slowdown in the next few years, and deep domestic capital markets continue to support the rating at A3.
“A solid institutional framework, including strong monetary policy effectiveness, also supports the credit profile, although in Moody's view, the government will face hurdles to significantly reining in pervasive corruption,” it said.