S&P affirms Malaysia’s credit ratings but flags political risks

S&P Global Ratings says political stability is imperative for Malaysia to achieve further economic reforms and fiscal consolidation.

PETALING JAYA: S&P Global Ratings has affirmed Malaysia’s sovereign credit ratings on the back of its robust economic growth, improving fiscal performance and monetary policy flexibility.

While the rating agency gave a positive assessment of the country’s economy, it also warned the ratings may be lowered over the next 24 months if political stability in Malaysia deteriorates.

In affirming its A– long-term and A-2 short-term foreign currency sovereign credit ratings as well as its A long-term and A-1 short-term local currency ratings, S&P also said the outlook on its long-term ratings is "stable".

It said Malaysia’s “consistently strong economic growth” and high degree of monetary policy flexibility underpin the sovereign ratings. In addition, its external position is supported by moderate current account surpluses and a large export base.