Tweetchat: Is Malaysia’s downgrade exaggerated?

Inside Investor’s Tweetchat held on August 2 discussed Malaysia’s current bearish economic perspectives and touched upon the question if Fitch’s credit rating downgrade was exaggerated or even justified.

However, tweets acknowledged that something has gone out of balance in Malaysia’s fiscal policy.

Participants said that reforms are urgently needed if Malaysia’s wants to maintain its current position as one of Southeast Asia’s strongest markets. It will have to introduce fiscal reforms, decrease the government’s debt level as well as leverage private company debt and will have to see it becomes less vulnerable to global money flows.

For example, up to 50 per cent of outstanding government bond of Malaysia are held by foreigners. By allowing this, Malaysia put itself in the danger to get heavily hit when the global financial ecosystem turns against it.

The question if Malaysia was prepared enough for the ASEAN Economic Community was answered with a careful “Better than others,” but there are still issues of tariffs and trade barriers to resolve, and awareness in the private sector is low.

A probably justified questions was raised by asking if credit agencies have enough merit to downgrade an entire country after earlier blunders they made. However, global investors are still listening to credit agencies’ decisions and that’s what counts. Fitch’s analysis was proper, based on the given macroeconomic fundamentals. In case of the Philippines, which received 3 upgrades lately and expects another one, nobody questioned the rating agencies’ decisions in terms of their merit.



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Inside Investor's Tweetchat held on August 2 discussed Malaysia's current bearish economic perspectives and touched upon the question if Fitch's credit rating downgrade was exaggerated or even justified. However, tweets acknowledged that something has gone out of balance in Malaysia's fiscal policy. Participants said that reforms are urgently needed if Malaysia's wants to maintain its current position as one of Southeast Asia's strongest markets. It will have to introduce fiscal reforms, decrease the government's debt level as well as leverage private company debt and will have to see it becomes less vulnerable to global money flows. For example, up to...

Inside Investor’s Tweetchat held on August 2 discussed Malaysia’s current bearish economic perspectives and touched upon the question if Fitch’s credit rating downgrade was exaggerated or even justified.

However, tweets acknowledged that something has gone out of balance in Malaysia’s fiscal policy.

Participants said that reforms are urgently needed if Malaysia’s wants to maintain its current position as one of Southeast Asia’s strongest markets. It will have to introduce fiscal reforms, decrease the government’s debt level as well as leverage private company debt and will have to see it becomes less vulnerable to global money flows.

For example, up to 50 per cent of outstanding government bond of Malaysia are held by foreigners. By allowing this, Malaysia put itself in the danger to get heavily hit when the global financial ecosystem turns against it.

The question if Malaysia was prepared enough for the ASEAN Economic Community was answered with a careful “Better than others,” but there are still issues of tariffs and trade barriers to resolve, and awareness in the private sector is low.

A probably justified questions was raised by asking if credit agencies have enough merit to downgrade an entire country after earlier blunders they made. However, global investors are still listening to credit agencies’ decisions and that’s what counts. Fitch’s analysis was proper, based on the given macroeconomic fundamentals. In case of the Philippines, which received 3 upgrades lately and expects another one, nobody questioned the rating agencies’ decisions in terms of their merit.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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