Positive Fiscal Trends Could Elevate Malaysia’s Rating - Maybank IB
KUALA LUMPUR, Dec 5 (Bernama) -- Malaysia's sovereign rating outlook for 2025 could see a positive shift, driven by promising fiscal developments, according to Maybank Investment Bank (Maybank IB).
The investment bank noted that the government’s net funding through bonds and bills this year amounts to RM77 billion, after offsetting RM93 billion in maturities, which is nearly RM7 billion lower than the budget deficit of RM84.3 billion or 4.3 per cent of gross domestic product (GDP), reaffirmed in October.
“We see upside potential to Malaysia’s rating, although a positive rating action would require stronger institutional profiles and a positive fiscal surprise. Now, one box appears to be ticked,” it said in a note today.
However, Maybank IB emphasised the importance of sustaining this performance and improving further.
It said that if the fiscal deficit improves by RM7 billion (0.35 per cent of GDP) this year and achieves a similar improvement against the 2025 target of 3.8 per cent, it would align with the medium-term fiscal plan, though not significantly outperform.
“Still, this is an encouraging development. Should the fiscal deficit beat the target by RM7 billion, we expect a positive outlook from S&P, Moody’s or Fitch on Malaysia’s rating within the next 12-15 months,” the bank added.
-- BERNAMA