Fitch Ratings has reaffirmed Malaysia's sovereign credit rating at 'BBB+' with a stable outlook, recognising the nation's robust economic progress and improved political stability. Key drivers behind the rating include Malaysia's strong and broad-based growth momentum, continuous current account surplus bolstered by foreign direct investments, narrowing fiscal deficit, and strengthened governance under the Ekonomi MADANI framework.
Prime Minister and Minister of Finance, YAB Dato' Seri Anwar bin Ibrahim, highlighted that this reaffirmation underscores the Government's commitment to significant legislative and institutional reforms. "This affirmation is a recognition of Malaysia's economic progress as envisioned under the Ekonomi MADANI framework, particularly the MADANI Government's dedication to policy clarity and effective economic management," he stated.
Fitch acknowledged Malaysia's improved policy certainty, citing the stable Government and recent economic reforms, including the Public Finance and Fiscal Responsibility Act 2023 and efforts to enhance state-owned enterprise governance. These align with the International Monetary Fund's endorsement of the Government's reform agenda aimed at boosting productivity and inclusive growth.
The Malaysian economy has demonstrated resilience, expanding by 5.3% in the third quarter of 2024, driven by strong domestic demand and improved external performance. The Government remains optimistic about achieving 2024's revised growth target of 4.8% to 5.3%, while planning for robust 4.5% to 5.5% growth in 2025 under Budget 2025.
As part of its fiscal consolidation efforts, the Government aims to reduce the fiscal deficit from 4.3% of GDP in 2024 to 3.8% by 2025. Measures include broadening revenue sources, optimising resources, and rationalising subsidies, particularly for RON95 petrol.
Institutional and structural reforms remain central to the Government's agenda to advance the economy, create high-skilled jobs, and boost national competitiveness in line with the Ekonomi MADANI framework.
