Moody’s Reaffirms Malaysia’s “A3” Sovereign Credit Rating with “Stable” Outlook

Moody

Kuala Lumpur, The Gulf Observer: Moody’s Investors Service has reaffirmed Malaysia’s sovereign credit rating at “A3” with a “Stable” outlook, citing the Federal Government’s consistent efforts to sustain economic growth and implement fiscal reforms amid global economic uncertainties and geopolitical fragmentation.

The Finance Ministry, in a statement on Saturday (Jan 25), highlighted that the rating reflects Malaysia’s economic resilience, well-diversified economic structure, and structural reforms guided by the Madani government.

Prime Minister Datuk Seri Anwar Ibrahim welcomed Moody’s affirmation, stating that it recognizes the government’s relentless drive for structural change, guided by high governance standards and clear policy directions.

“The government remains steadfast in pursuing economic reforms and fostering regional growth to benefit all Malaysians. This year, we will further accelerate fiscal and economic reforms as outlined in Budget 2025, prioritizing quality investments, higher-income job creation, and integrated infrastructure developments to support economic diversification,” he said.

Anwar, who also serves as Finance Minister, added that Malaysia would leverage its chairmanship of ASEAN in 2025 to steer the regional bloc toward a unified economic order, fostering mutual cooperation and shared prosperity.

Positive Growth Prospects

Moody’s projects Malaysia to be the fastest-growing A-rated economy over the next two years, with medium-term growth prospects remaining strong. Structural credit strengths, including a diversified economic structure, broad price stability, competitive markets, and a sophisticated financial system, are among the key factors supporting the country’s rating.

The rating agency also noted the government’s progress in enacting key legislations, such as the Public Finance and Fiscal Responsibility Act 2023, and recognized broad political support that enables the implementation of structural and institutional reforms.

The Finance Ministry emphasized the government’s commitment to improving public finances through revenue enhancement and subsidy rationalization. Malaysia’s GDP growth is on track to achieve its target of 4.8% to 5.3% for 2024, with advanced estimates for the fourth quarter of 2024 at 4.8%.

Looking ahead, the government expects robust economic growth in 2025, projected between 4.5% and 5.5%. Fiscal consolidation efforts are also set to narrow the budget deficit from 4.3% of GDP in 2024 to 3.8% in 2025, aligning with targets under the Public Finance and Fiscal Responsibility Act.

The reaffirmed rating and stable outlook reflect Malaysia’s ongoing efforts to maintain economic resilience, fiscal discipline, and governance standards in an increasingly complex global landscape.