S&P’s rating demonstrates confidence in Malaysia’s economic outlook

KUALA LUMPUR: The affirmation of Malaysia’s credit rating by Standard and Poor’s (S&P) last week demonstrates its confidence in Malaysia’s positive economic outlook, strong institutional profile, sound economic fundamentals and prudent debt management.

In a statement yesterday, the Ministry of Finance (MoF) welcomed S&P Global Ratings’ affirmation of Malaysia’s issuer credit rating at A- with a stable outlook last week.

Minister Lim Guan Eng said the reaffirmation also shows that the increase in the government’s direct debt does not affect Malaysia’s sovereign credit ratings, especially when the government’s overall debt and liabilities have been reduced.

He said one of the key drivers for the rating was Malaysia’s healthy growth prospect.Additionally, despite the ongoing trade war between China and the United States, Malaysia’s exports have been rising above expectations for the second straight month due to trade diversions.

In May 2019, exports grew 2.5% to RM84.1bil from RM82.1bil a year ago, which is above the 2.2% market consensus as compiled by Bloomberg.

As a result of the continuous export growth, trade surplus for the first five months of 2019 rose by 4.3% to RM56.8bil, compared with RM54.5bil in the same period last year.

Approved foreign direct investment (FDI) across all sectors for the first quarter of 2019 rose 73.4% to RM29.3bil versus RM16.9bil a year ago.

The growth was driven by a 127% increase in approved manufacturing FDI, which rose to RM20.2bil from RM8.9bil a year ago. — Bernama

Source: TheStar