KUALA LUMPUR, Feb 16 — Fitch Ratings’ affirmation on Malaysia’s sovereign credit rating at ‘BBB+’ with a stable outlook for 2023 reflects its confidence in the current government’s administration, said Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim.

In a statement today, Anwar said the affirmation also showed the international rating agency’s confidence in the strength of Malaysia’s economic recovery as well as the country’s resilience amidst an uncertain and highly challenging global landscape.

"Malaysia’s ratings balance a diversified economy with strong medium-term growth prospects against high public debt, a low revenue base relative to the operating expenditures,” said Anwar, citing Fitch’s statement released yesterday.

According to Fitch, Malaysia’s gross domestic product (GDP) is expected to moderate to four per cent in 2023 and 4.8 per cent in 2024, from a strong growth of 8.7 per cent in 2022 amid easing of Covid-19 restrictions and as the government continues to provide relief measures and support towards rapid and broad recovery of the economy.

Fitch also expects the services sector to continue to be boosted by resilient domestic demand, contained inflation and the recovery in tourism-related sectors from the reopening of China.

"The medium-term growth trend is expected to remain robust between four and five per cent,” it said, anticipating that manufacturing and exports are likely to face headwinds from weaker global demand for electronics and commodities.

Meanwhile, Fitch assumes deficit reductions will be gradual and expects fiscal deficit to decline to an average of around 4.5 per cent of GDP in 2023 to 2025, citing upside risks including greater expenditure rationalisation and substantial revenue mobilisation measures.

Moving forward, Anwar said the government is determined to ensure that the nation’s fiscal position continues to strengthen through gradual consolidation of the fiscal deficit, while balancing the need to support economic growth during these challenging times globally.

"Through Budget 2023, which will be tabled on February 24, 2023, the government will continue to intensify reform efforts to drive the country’s economic recovery, boost investment and improve public infrastructure.

"Continued emphasis will also be placed on initiatives to control inflationary pressures and ease the people’s burden from the high cost of living,” he said.

In addition, Anwar said Budget 2023 will focus on strengthening the country’s finances and governance, to support the government’s commitment to sustain the economic recovery momentum towards improving the people’s well-being, in line with the budget’s theme of "Building Malaysia Madani.” — Bernama