KUALA LUMPUR, Jan 23 — Malaysia can sidestep the risk of any ratings downgrade by implementing sound economic policies and measures, Permodalan Nasional Bhd (PNB) chairman Tan Sri Abdul Wahid Omar said today.

He said the country’s strong credit ratings have been a boon to local businesses and the economy, and urged the government to take steps to preserve Malaysia’s creditworthiness.

"If we don’t manage our economy well, we are at risk of being downgraded in our credit rating. Whether it is A- or A3, both have enabled Malaysian corporates to borrow at reasonable levels.

"If our credit were to be downgraded, then our cost of borrowing will go up,” he told reporters on the sidelines of the Invest Malaysia 2018 forum here today.

The former minister also said Malaysia could further reinforce its existing ratings by diversifying its revenue stream and further reduce its dependence on resource-derived income.

Malaysia has already weaned itself of its previous dependence on petroleum income, allowing the country to weather the plunge in oil prices in 2015.

Wahid then expressed confidence about the state of the Malaysian economy, noting that gross domestic product was still expanding strongly while investors were again returning strongly as noted by the ringgit’s continued revival

In recent weeks, major ratings firm have reiterated their outlook for Malaysia.

Moody’s said it expected Malaysia to continue performing well despite some concerns with its household and public debt.

Before that, RAM Ratings said Malaysia’s sovereign ratings remain intact, underscored by the country’s expected GDP growth of 5.2 per cent in 2018.