KUALA LUMPUR — Moody’s Ratings (Moody’s) has reaffirmed Malaysia’s sovereign credit rating at “A3” with a “stable” outlook while declaring that Malaysia’s medium-term growth prospects remain buoyant.
This reflects the consistent efforts undertaken by the government to sustain economic growth, as well as staying the course in its fiscal reforms despite the uncertainties reshaping global economy and geopolitical fragmentation, the Finance Ministry (MoF) said in a statement today.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said Moody’s affirmation recognises the MADANI Government’s relentless efforts to drive structural change, guided by clear policy directions and an unwavering commitment to high governance standards.
“The government remains steadfast in pursuing economic reforms and fostering regional growth, ensuring the fulfilment of its reform agenda for the benefit of all Malaysians,” he said in the statement.
Anwar said the MADANI Government will drive fiscal and economic reforms further this year, as outlined in Budget 2025, while prioritising quality investments for higher-income jobs, as well as accelerating integrated infrastructure developments to support economic diversification and new opportunities.
“We will also capitalise on Malaysia’s chairmanship of ASEAN 2025 to lead the economic bloc into a unified economic order that thrives on cooperation and engenders a mutually beneficial outcome for the region,” he added.
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 bulwark consumption, complemented by deep domestic capital markets and a sophisticated financial system.
Moody’s recognises the broad political support 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.
In this regard, the government remains committed to improve public finance by amplifying efforts on revenue enhancement and subsidy rationalisation, the MoF said.
With advanced estimates for the fourth quarter 2024 gross domestic product (GDP) at 4.8%, Malaysia is on track to achieve its economic growth target of 4.8% to 5.3%, it said.
The government is optimistic that growth will remain robust in 2025 at between 4.5% and 5.5%.
Meanwhile, fiscal consolidation efforts will further narrow the deficit — expected at 4.3% of GDP in 2024 — to 3.8% in 2025, gradually aligning to the fiscal target under the Public Finance and Fiscal Responsibility Act 2023, the ministry said. – January 25, 2025