Moody’s Affirms Malaysia’s Sovereign Credit Rating at ‘A3’

Consistent Efforts Underpin Growth Prospects

Moody’s Ratings (Moody’s) has reaffirmed Malaysia’s sovereign credit rating at “A3” with a “stable” outlook, reflecting the consistent efforts undertaken by the government to sustain economic growth. The Finance Ministry (MoF) stated that this decision recognizes the government’s relentless efforts to drive structural change, guided by clear policy directions and an unwavering commitment to high governance standards.

Government Committed to Fiscal and Economic Reforms

Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim emphasized that the government remains steadfast in pursuing economic reforms and fostering regional growth, ensuring the fulfillment of its reform agenda for the benefit of all Malaysians. The MADANI Government will drive fiscal and economic reforms further this year, as outlined in Budget 2025, while prioritizing quality investments for higher-income jobs, as well as accelerating integrated infrastructure developments to support economic diversification and new opportunities.

Medium-Term Growth Prospects Remain Buoyant

According to Moody’s, Malaysia will be the fastest-growing A-rated economy over the next two years, and the country’s medium-term growth prospects remain buoyant. The rating agency cited structural credit strengths, including a well-diversified economic structure, competitiveness, and broad price stability, as among the factors that underpin consumption, complemented by deep domestic capital markets and a sophisticated financial system.

Government Committed to Public Finance Reforms

Moody’s recognizes the broad political support that has provided headroom to the government to implement substantial structural and institutional reforms, as well as the enactment of the Public Finance and Fiscal Responsibility Act 2023, among other legislation. The government remains committed to improving public finance by amplifying efforts on revenue enhancement and subsidy rationalisation.

Economic Growth and Fiscal Consolidation

With advanced estimates for the fourth quarter 2024 gross domestic product (GDP) at 4.8 per cent, Malaysia is on track to achieve its economic growth target of 4.8 to 5.3 per cent. The government is optimistic that growth will remain robust in 2025 at between 4.5 and 5.5 per cent. Fiscal consolidation efforts will further narrow the deficit, expected at 4.3 per cent of GDP in 2024, to 3.8 per cent in 2025, gradually aligning to the fiscal target under the Public Finance and Fiscal Responsibility Act 2023.

Conclusion

In conclusion, Moody’s affirmation of Malaysia’s sovereign credit rating at “A3” with a “stable” outlook reflects the government’s consistent efforts to sustain economic growth and drive structural change. The government remains committed to fiscal and economic reforms, public finance reforms, and medium-term growth prospects remain buoyant.

FAQs

* What is Moody’s sovereign credit rating for Malaysia?
Moody’s has reaffirmed Malaysia’s sovereign credit rating at “A3” with a “stable” outlook.
* What are the key factors that underpin Malaysia’s growth prospects?
Structural credit strengths, including a well-diversified economic structure, competitiveness, and broad price stability, as well as deep domestic capital markets and a sophisticated financial system.
* What are the government’s plans for fiscal and economic reforms?
The government will drive fiscal and economic reforms further this year, as outlined in Budget 2025, while prioritizing quality investments for higher-income jobs, as well as accelerating integrated infrastructure developments to support economic diversification and new opportunities.
* What are the government’s plans for public finance reforms?
The government remains committed to improving public finance by amplifying efforts on revenue enhancement and subsidy rationalisation.