KUALA LUMPUR: The ongoing institutional reforms, greater accountability, fiscal transparency and political stability have led to Malaysia’s strong credit ratings, says Finance Minister Lim Guan Eng.In a statement yesterday, Lim said the Finance Ministry welcomed Fitch Ratings’ confirmation of Malaysia’s sovereign credit ratings at A- with a stable outlook.
“Fitch expects Malaysia’s institutional quality to improve further over time due to the wider implementation of open tenders, fiscal transparency, anti-corruption and institutional reform measures to promote accountability and fiscal responsibility,” he said.
He added that the affirmation was proof that the increase in direct debt bore no adverse impacts, as the government’s overall debt and liabilities’ percentage of the gross domestic product (GDP) had been reduced.
“The government’s total debt and liabilities to GDP ratio has reduced by 3.9% to 75.4% as of end-2018, from 79.3% at end-2017,” he said.
Lim said the government was confident that it would be able to reduce its fiscal deficit from 3.7% of GDP in 2018 to 3.4% in 2019.
“It should be highlighted that Fitch believes the government’s debt level relative to the GDP will gradually decrease over the next few years, due to a clear fiscal consolidation plan outlined by the government,” he said.
On Thursday, Fitch Ratings affirmed Malaysia’s long-term foreign currency issuer default rating at A- with a stable outlook.
It said the key rating drivers were the country’s strong and broad-based medium-term growth with a diversified export base, while noting concerns about the high public debt and some lagging structural factors. — Bernama