Fitch Ratings on Monday affirmed Malaysia’s long-term foreign-currency issuer default rating at “BBB+” with a stable outlook, citing strong growth prospects and persistent current account surpluses.
The agency said Malaysia’s diversified export base and medium-term growth outlook support the rating, but noted risks from high public debt, a lower revenue base and weaker external liquidity compared with peers. Fitch expects the government’s debt-to-GDP ratio to decline only gradually, underpinned by fiscal consolidation efforts.
Malaysia’s economy is forecast to expand by 4.6 percent in 2025, easing to 4 percent in 2026 and 4.2 percent in 2027. Firm labor market conditions and rising wages are expected to sustain household spending into next year.
Approved investment projects rose 13.2 percent year-on-year in the first nine months of 2025, with a strong pipeline in artificial intelligence-related capital expenditure expected in 2026.
Exports surprised on the upside in 2025 amid a global tech upcycle and front-loading, but Fitch said shipments are likely to soften in 2026 as front-loading fades.