KUALA LUMPUR: Fitch Ratings' investment grade rating for Malaysia is a recognition of Malaysia's economic progress as envisioned under the Ekonomi Madani framework, according to Prime Minister Datuk Seri Anwar Ibrahim.
In a statement issued by the Finance Ministry, Anwar, who is also Finance Minister, said the ratings acknowledge the government's commitment to implement significant legislative and institutional reforms, that has resulted in better policy clarity and effective economic management.
On Monday, Fitch Ratings reaffirmed Malaysia sovereign credit rating at BBB+, with a "Stable" outlook.
The ratings are supported by strong medium-term growth driven by robust domestic and foreign investments, persistent current account surpluses, and a diversified export base.
MOF said Fitch acknowleged that policy certainty has improved in the country as a result of a more stable government and demonstrated by the introduction of various economic reforms.
This includes strengthening state owned enterprise governance and legislation, including the Public Finance and Fiscal Responsibility Act 2023.
The rating is in line with the International Monetary Fund's views on the government's timely reform agenda in enhancing productivity and inclusive growth.
Notably, the introduction of the Public Finance and Fiscal Responsibility Act 2023 has strengthened fiscal governance, complementing other measures aimed at improving the management of state-owned enterprises.
These reforms have been viewed positively, with the IMF also acknowledging their role in enhancing productivity and fostering inclusive growth.
The Malaysian economy expanded by 5.3 per cent in the third quarter of 2024, supported by domestic demand and improved trade performance and the government remains confident of robust growth for the year.
This led to a revision of Malaysia's 2024 gross domestic product (GDP) forecast upward to between 4.8 and 5.3 per cent from an earlier estimate of 4 to 5 per cent.
Meanwhile, fiscal consolidation remains a priority, with the fiscal deficit projected to narrow from 4.3 per cent of GDP in 2024 to 3.8 per cent in 2025.
Additionally, in 2025 Budget, the government has outlined strategies to sustain economic growth, with GDP projected to grow between 4.5 per cent and 5.5 per cent in 2025.
Key measures include broadening revenue streams, optimising resource use, and implementing subsidy rationalisation, particularly for RON95 petrol.
Moreover, the government also aims to prioritise institutional and structural reforms to transform Malaysia's economy, creating high-skilled jobs, boosting productivity, and enhancing competitiveness.