KUALA LUMPUR, July 1 (Bernama) — The government is taking firm steps to address concerns including the country’s narrowing current account surplus and smaller external liquidity ratio as raised by Fitch Ratings Agency, says Prime Minister Datuk Seri Najib Tun Razak.
He also assured that the government would look into the possible expansion in contingent liability due to 1Malaysia Development Bhd (1MDB).
“While Malaysia is pleased with the credit ratings and upward revision of Malaysia’s outlook by Fitch Rating Agency, we are determined to maintain our fiscal sustainability policy and have in place the most firm economic foundation for our high-income ambition,” Najib said in a statement.
The international rating agency yesterday affirmed the country’s long-term foreign currency rating at A- and revised upwards its outlook on the long-term issuer default rating (IDR) to stable from negative.
Najib said this positive development is indeed a firm recognition that Malaysia’s economic and financial policy was on the right track and demonstrated the international marketplace’s confidence in country’s transformation programme.
“We are steadfast in our resolve to maintain fiscal sustainability. We are determined to meet our annual budget deficit reduction targets, reduce our budget deficit to Gross Domestic Product from 4.8 per cent to 3.2 per cent this year which will lead to a balanced budget in the next five years,” he said.
The prime minister said Malaysia has implemented the Goods & Services Tax and this consumption tax broadened and stabilised the government’s revenue base.
“We have also rationalised our subsidies across several subsidies, most significantly, our subsidy for oil.
“The net position in the government’s revenue will be used to improve the rakyat’s welfare and economic prospects,” Najib added.