Tweetchat: Yes it happened. Fitch downgrades Malaysia

Najib
Malaysia’s prime minister Najib Razak has come under pressure to speed up fiscal reforms

Credit rating agency Fitch on July 30 has downgraded Malaysia’s credit rating outlook to negative from stable, causing the ringgit to decline the most in three weeks, bonds to extend losses and share prices of blue chips to slump.

Fitch, citing rising debt levels and a lack of budgetary reform, said that Malaysia’s public finances are its “key rating weakness.” The shrinking current-account surplus and rising sovereign debt raises the risk of capital outflows, putting the ringgit on course for its worst month in more than a year.

Investvine has repeatedly mentioned the obvious deterioration of Malaysia’s fiscal ecosystem in the recent past, and we will hold a Tweetchat on the issue on Friday, August 3, at 3pm Malaysia time. Please join under https://twitter.com/insideinvestor.

According to CIMB Equities Research, the other two big rating agency Moody’s and Standard & Poor’s are also likely to downgrade Malaysia’s sovereign credit rating outlook if there was no clear indications from the government on fiscal reforms regarding subsidies, taxes and government spending after the election.

Despite Fitch kept the country’s existing high investment-grade ratings of “A-” on long-term foreign debt and “A” on long-term local debt, its July 30 announcement triggered a flight of foreign funds out of the country on the very same day.

Federal government debt in Malaysia rose to 53.3 per cent of GDP at end-2012, up from 51.6 per cent at end-2011 and 39.8 per cent at end-2008. The general government budget deficit also widened to 4.7 per cent of GDP in 2012 from 3.8 per cent in 2011, led by a 19 per cent rise in spending on public wages in a pre-election year.

 

 

 



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[caption id="attachment_13263" align="alignleft" width="300"] Malaysia's prime minister Najib Razak has come under pressure to speed up fiscal reforms[/caption] Credit rating agency Fitch on July 30 has downgraded Malaysia's credit rating outlook to negative from stable, causing the ringgit to decline the most in three weeks, bonds to extend losses and share prices of blue chips to slump. Fitch, citing rising debt levels and a lack of budgetary reform, said that Malaysia’s public finances are its “key rating weakness.” The shrinking current-account surplus and rising sovereign debt raises the risk of capital outflows, putting the ringgit on course for its worst...

Najib
Malaysia’s prime minister Najib Razak has come under pressure to speed up fiscal reforms

Credit rating agency Fitch on July 30 has downgraded Malaysia’s credit rating outlook to negative from stable, causing the ringgit to decline the most in three weeks, bonds to extend losses and share prices of blue chips to slump.

Fitch, citing rising debt levels and a lack of budgetary reform, said that Malaysia’s public finances are its “key rating weakness.” The shrinking current-account surplus and rising sovereign debt raises the risk of capital outflows, putting the ringgit on course for its worst month in more than a year.

Investvine has repeatedly mentioned the obvious deterioration of Malaysia’s fiscal ecosystem in the recent past, and we will hold a Tweetchat on the issue on Friday, August 3, at 3pm Malaysia time. Please join under https://twitter.com/insideinvestor.

According to CIMB Equities Research, the other two big rating agency Moody’s and Standard & Poor’s are also likely to downgrade Malaysia’s sovereign credit rating outlook if there was no clear indications from the government on fiscal reforms regarding subsidies, taxes and government spending after the election.

Despite Fitch kept the country’s existing high investment-grade ratings of “A-” on long-term foreign debt and “A” on long-term local debt, its July 30 announcement triggered a flight of foreign funds out of the country on the very same day.

Federal government debt in Malaysia rose to 53.3 per cent of GDP at end-2012, up from 51.6 per cent at end-2011 and 39.8 per cent at end-2008. The general government budget deficit also widened to 4.7 per cent of GDP in 2012 from 3.8 per cent in 2011, led by a 19 per cent rise in spending on public wages in a pre-election year.

 

 

 



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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