The finance ministry today said a rating agency’s reaffirmation of Malaysia’s issuer credit rating at A- with a stable outlook is proof the increase in Putrajaya’s direct debt does not affect the country’s credit standing.
In welcoming S&P Global Ratings’ reaffirmation, the minister Lim Guan Eng says this especially so when the government’s overall debt and liabilities have been reduced.
Lim said the government’s direct debt has risen to 51.2% of GDP in 2018 from 50.1% in 2017 and it is only one component of the government’s overall debt and liabilities.
“The other components are committed government guarantees and finance leases, as well as other liabilities including 1MDB debt which the government is compelled to service directly,” he said in a statement.
He said S&P’s reaffirmation demonstrates its confidence in Malaysia’s positive economic outlook, strong institutional profile, sound economic fundamentals and prudent debt management.
“S&P acknowledges the government’s efforts to restore its finances through rigorous fiscal management, including in managing its overall debt and liabilities,” he said.
Lim also attributed the nation’s healthy growth prospect of 4.6% and rising exports – due to the ongoing trade war between China and the US – for the nation’s latest ratings.