KUALA LUMPUR: Moody's Ratings has affirmed Malaysia's long-term local- and foreign-currency issuer ratings at A3 with a stable outlook, reflecting continued confidence in Malaysia's credit profile, said the Ministry of Finance (MoF).
In a statement, the ministry said Moody's also expects Malaysia to be the fastest-growing economy among its A-rated peers in 2026, underpinned by its diversified and competitive economy, strong medium-term growth prospects, ample natural resources, and deep domestic savings.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said Moody's assessment reflects the resilience of the Malaysian economy and the progress made in strengthening fiscal discipline, improving governance, and broadening the revenue base.
"This assessment should strengthen our resolve, not invite complacency. Much remains to be done to ensure that sound economic management is felt in the incomes, opportunities, and daily lives of the rakyat.
"Amid heightened geopolitical tensions and continued volatility in global markets, Malaysia must preserve domestic stability, policy certainty, and reform momentum. The government will remain focused on protecting the economy and strengthening the foundations for sustainable growth," said the prime minister.
Moody’s attributed Malaysia's stronger economy of 5.4 per cent year-on-year in the first quarter of 2026 (1Q 2026) to buoyant domestic demand, particularly private consumption and investment, as well as a stronger contribution from electronics exports.
It also recognised that revenue reforms implemented since 2023 have broadened the tax revenue base sufficiently to sustain gradual fiscal consolidation, despite higher subsidy expenditure arising from elevated global energy prices and increased development spending under the 13th Malaysia Plan (2026-2030) (13MP).
The rating agency also highlighted Malaysia’s solid executive and legislative institutions, track record of effective macroeconomic policymaking, favourable domestic funding conditions, and broad macroeconomic stability.
MoF said the stable outlook reflects balanced risks to Malaysia's credit profile, while stronger economic performance and faster fiscal consolidation could support higher revenue generation, material debt reduction, and improved debt affordability.
Beyond Moody’s assessment, Malaysia’s broader economic indicators also point to strengthening fundamentals.
The MoF said the unemployment rate fell to 2.9 per cent in 1Q 2026 -- its lowest level in over a decade -- as total employment rose to 16.7 million persons and 48,500 new jobs were created during the period.
Malaysia also advanced eight places to 15th among 70 economies in the 2026 IMD World Competitiveness Ranking, its highest position since 2020.
The country maintained its fourth-place global ranking in Economic Performance while recording improvements in Government Efficiency, Business Efficiency, and Infrastructure.
Meanwhile, the ringgit appreciated by 10.1 per cent against the US dollar in 2025, making it Asia’s strongest-performing currency for the year.
"The MADANI Government remains committed to the fiscal objectives prescribed under the Public Finance and Fiscal Responsibility Act 2023 (Act 850).
"It will continue to broaden the revenue base, improve expenditure efficiency, strengthen fiscal transparency, and better target subsidies, while protecting the welfare of the rakyat," said MoF. - Bernama
