KUALA LUMPUR, Sept 17 — Moody’s Investor Service has projected that the Malaysian economy would expand by 6.0 per cent this year and 5.0 per cent in 2015, driven by its relative diversification and continuing regional economic integration.
"These projections are stronger than the median growth forecast of 2.9 per cent and 3.3 per cent projected for A-rated countries in those respective years.
"We expect Malaysia to sustain higher growth in the medium-term compared with most rating peers. Its robust growth performance and outlook supports credit-worthiness," it said in its credit analysis report titled "Government of Malaysia".
The rating agency’s assessment of Malaysia’s economic strength as ‘High (+)’ underscored the large scale and diversification of the country’s output, its strong medium-term growth prospects and competitiveness, and its ample natural resources.
The Malaysian government’s fiscal reform programme, which commenced last year, prompted Moody’s revision of the outlook on the A3 sovereign rating to positive from stable last November.
It said the positive outlook reflected its expectation of Malaysia’s continued economic out performance, relative to A-rated peers, against challenges in executing its fiscal reform programme.
"Significant consolidation of the government’s fiscal deficits and the debt burden could trigger an upgrade.
"Despite the subsequent drag on growth from fiscal consolidation, the Malaysian economy has performed strongly in the first half of 2014 with real gross domestic product (GDP) growth averaging 6.4 per cent, year-on-year, over this period," it added.
The report elaborated on Malaysia’s credit profile in terms of economic, institutional and fiscal strength and, susceptibility to event risk, which are the four main analytic factors in Moody’s Sovereign Bond Rating Methodology. — Bernama
