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Latest credit ratings

These scores indicate continued confidence in the country's robust and resilient growth, in spite of a challenging external environment, sound track record of monetary and fiscal policy as well as strong external position.

S&P Global Ratings

S&P Global Ratings

Rating

A-

Outlook

Stable

  • Steady medium-term growth prospects
  • Conducive policymaking environment
  • Strong external position
As of 12:00 PM GMT+00:00, 27 Jun 2024
Moody's Ratings

Moody's Ratings

Rating

A3

Outlook

Stable

  • Diversified and competitive economy
  • Large pool of domestic savings
  • Sound financial sector
  • Favourable debt structure
As of 12:00 PM GMT+00:00, 17 Jul 2024
Fitch Ratings

Fitch Ratings

Rating

BBB+

Outlook

Stable

  • Well diversified economy
  • Strong medium-term GDP growth prospects
  • Consistent annual current account surpluses
As of 12:00 PM GMT+00:00, 27 Jun 2024

Strengthening and preserving our ratings

Malaysia has continually undertaken steps to improve and stabilise its sovereign credit profile.

While ratings are influenced by a variety of factors, Malaysia’s government has focused on policies that enhance economic and fiscal resilience.

Below are key actions Malaysia has taken to improve its creditworthiness.

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Fiscal Consolidation & Debt Management

The Government is firmly committed to ensure public finance sustainability by adhering to a consistent fiscal consolidation trajectory.

Some of the key initiatives include:
Public Finance and Fiscal Responsibility Act 2023

Introduced to enhance fiscal discipline and ensure a more structured approach to managing public finances in supporting the country's medium-term fiscal framework. In this regard, the Government has set the following targets:

  1. Annual development expenditure of at least 3% as a percentage of gross domestic product (GDP)
  2. Fiscal balance of -3% or less as a percentage of GDP
  3. Debt level at 60% or less as a percentage of GDP; and
  4. Financial guarantees not exceeding 25% as a percentage of GDP

These measures are expected to strengthen public finances and support long-term fiscal sustainability.

Targeted subsidy reforms
The government has begun transitioning from blanket subsidies to more targeted measures to optimise fiscal spending while protecting vulnerable segments of society. These rationalisation measures include:

Revisions to water tariffs
Targeted diesel subsidies
Reduction to electrical subsidies

 

Improving tax administration
In recent years, the Government has made efforts to increase the tax elasticity to growth by increasing efficiency, and improving tax compliance. Key drivers behind this include the digitalisation of tax-filing, the introduction of taxes which target new growth areas and the shadow economy, and increased commitments to international tax standards.

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Robust economic growth

Malaysia's GDP is projected to expand between 4.8-5.3% in 2024, well above the A-rated median of 2.3%. Key growth drivers are stronger household spending and recovery in good exports.

In addition, investment is expected to remain strong, benefitting from regional supply chain shifts, particularly in electrical and electronics (E&E) sector, and policies aimed at higher-value manufacturing and energy transition.

Importantly, Malaysia's diversified economy would also lend support to its strong medium-term growth outlook.

Key initiatives to further drive longer-term economic expansions include:

Ekonomi MADANI Framework

The Ekonomi MADANI Framework provides a roadmap for sustainable growth that guides strategic socioeconomic planning.

New Industrial Master Plan 2030 (NIMP)

The NIMP 2030 is an industrial strategy focused on the manufacturing and manufacturing-related services sectors. It is designed to elevate industries by leveraging emerging global trends for diversification, growth and transformation.

National Energy Transition Roadmap (NETR)

Aims to accelerate Malaysia's shift to renewable energy sources, enhancing energy efficiency and promoting green technologies.

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Understanding sovereign credit rating assessments

Sovereign credit ratings indicate a country's economic health and creditworthiness, reflecting fiscal management, stability, and debt repayment ability.
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