KUALA LUMPUR, Dec. 5 (Xinhua) -- Fitch Ratings on Tuesday affirmed Malaysia's long-term foreign-currency issuer default rating (IDR) at "BBB+" with a stable outlook.
The rating agency said in a statement that Malaysia's ratings balance a diversified economy with strong medium-term growth prospects against high public debt, a low revenue base relative to operating expenditure, and political considerations that may hinder long-term policymaking and reform implementation.
Fitch expects Malaysia's real gross domestic product (GDP) growth to moderate to 4 percent in 2023 and 4.2 percent in 2024, from the post-pandemic rebound of 8.7 percent in 2022.
It said that Malaysia's exports will still face headwinds from weak global demand and trade restrictions.
However, it opined that wages and expansion in investment activity should underpin resilient domestic demand.
Fitch also projected the Malaysian general government deficit to further decline to 3.5 percent in 2025 amid further subsidy rationalization and the rollout of the global minimum tax.
In addition, it forecast the general government deficit to narrow to 2.8 percent of gross domestic product (GDP) in 2025 from an average of 5.2 percent of GDP in 2020-2022.
It also estimated general government debt to slide to 72.3 percent of GDP in 2023, from 72.8 percent in 2022.
Fitch also forecast Malaysia's current account surplus to narrow to 2.6 percent of GDP in 2023 from 3 percent of GDP in 2022.
"Malaysia is well-positioned to benefit from the global supply-chain diversification with its competitive manufacturing sector, and foreign direct investment (FDI) inflows have picked up noticeably since the reopening of the economy in 2022," it said. ■