KUALA LUMPUR: Malaysia is expected to maintain its credit rating despite the higher fiscal projections, supported by the government’s efforts to restore public finances and debt, in terms of the fiscal deficit over the medium term, according to the latest ICAEW report “Economic insight: South-East Asia”.
Malaysia’s fiscal position is expected to improve, with the deficit estimated to come in at 3.5% of gross domestic product (GDP) in 2019, slightly higher than the government’s target of 3.4%.
ICAEW economic advisor Sian Fenner said other factors that support Malaysia’s positive credit ratings include lower interest rate payments as a share of revenue following Japan’s announcement to support Malaysia’s 200 billion yen ‘samurai bond’ issuance, improved transparency and governance standards.
However, Malaysia’s GDP growth is expected to ease to 4.5% next year, from 4.8% in 2018 due to the ongoing US-China trade conflict and tighter global monetary conditions.
