RAM to maintain Malaysia’s sovereign rating

By NUR HAZIQAH A MALEK

Malaysia’s gA2 sovereign rating is to prevail following the victory of Pakatan Harapan in the recent elections, according to RAM Ratings.

RAM Ratings said while it anticipates some changes in economic and fiscal policies, the emphasis on governance and institutional reforms by the new leadership is expected to be a long-term positive for the country’s fundamentals.

The rating agency said the country’s current gross domestic product (GDP) of 5.2% forecast for 2018 is retained.

“We are closely monitoring developments, especially on the newly formed Council of Eminent Persons because this council is expected to shape most of the economic reform and maintain financial stability during this transition,” said RAM Ratings.

According to RAM Ratings, the GDP growth will be at risk from the investment momentum that will be affected by the slowdown in infrastructure investment implementation rates due to uncertainties.

“This will affect our private investment projection of 8% for this year,” it said.

The company said the large infrastructure project reviews and the abolition of tolls pledged by Pakatan Harapan could affect construction players and toll road projects.

The removal of the Goods and Services Tax (GST) may influence the RM44 billion in GST revenue that was estimated for 2018.