KUALA LUMPUR, Nov 8 — Budget 2019 contains policies that promise greater transparency in the Malaysian government’s spending but is vulnerable to fluctuations in global oil price, said Moody's Investors Service.

The ratings agency is the latest to express concern over Malaysia’s apparent return to relying on state oil firm Petronas that had once been dubbed Putrajaya’s "piggy bank”.

Moody’s also stated its misgivings about the widening fiscal deficit, which Finance Minister Lim Guan Eng said will be 3.7 per cent of the entire economy this year.

"In 2018, higher dividends from state-owned oil company Petronas will not bridge revenue losses from the switch to a Sales and Service Tax (SST) from the Goods and Service Tax (GST) and higher spending on fuel subsidies and salaries and emoluments.

"Moreover, with the replacement of GST with SST, petroleum-related revenue  has increased to about 31 per cent of total revenue from less than 16 per cent in 2017, making government income susceptible to oil price volatility,” it said in an advisory note today.

Fitch Ratings issued a similarly-themed note on the Malaysian Budget earlier this week, citing the same concerns about the dependence on petroleum-derived revenue as well as special direct infusions from Petronas.

Lim tabled a RM314 billion Budget 2019 on Friday, the largest in the country’s history.

This will be funded in part by a one-off RM30 billion dividend from Petronas.