Rating upgrade for Malaysia?
04 Feb 2015
KUALA LUMPUR: SOVEREIGN rating agency Moody’s reaffirmed rating for Malaysia puts the country in a stronger chance of securing an upgrade in the future, said Treasury Secretary-General Tan Sri Dr Irwan Serigar Abdullah.
“Maintaining a positive outlook at the time of cyclical downturn demonstrates that Moody’s gives credit to the government for prudent policy management,” he said in response to the rating agency’s report last week.
Moody’s Investors Service on Friday affirmed the government bond and issuer ratings at A3, with positive outlook.
It said many of the fiscal adjustments to Malaysia’s operating expenditure demonstrates the government’s commitment to meeting its fiscal rules and sustaining its fiscal consolidation trend.
It said although downside risks to global oil prices remain, the consequent risks to Malaysia’s budget are manageable, given the government’s decreasing reliance on oil revenue.
Speaking to Business Times, Irawan said: “The ratings agency also acknowledges that Malaysia has successfully diversified away from being energy dependent, which has made the country less vulnerable to shocks.
“With this reaffirmation, we have a strong chance of securing an upgrade in the future.” Irwan added that Moody’s reaffirmation also showed the strong fundamentals of the Malaysian economy.
Moody’s cited key drivers on its decision on Malaysia, namely the government’s intention to adhere to its policy of deficit reduction, and the ability of the country’s macroeconomic stability, domestic capital market depth, and a favourable government debt structure to resist an adverse external economic environment, lower oil prices and global financial market volatility.