Fitch revises Malaysia’s outlook to ‘Negative’, projects 5.8% growth next year

The country’s latest RM260b stimulus is expected to add 2.9 ppts to its 2020 GDP growth, says finance minister

by RAHIMI YUNUS/ pic by RAZAK GHAZALI

FITCH Ratings Inc affirmed Malaysia’s long-term foreign-currency issuer default rating at A- and revised the outlook from ‘Stable’ to ‘Negative’, according to Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz (picture) .

Tengku Zafrul said the international rating agency also projected the country’s economy to grow 5.8% next year.

“Malaysia has responded to the global health crisis and synchronised worldwide economic shock in a timely, decisive and comprehensive manner,” Tengku Zafrul said in a statement yesterday.

He added that collectively, Malaysia’s RM260 billion economic stimulus measures are expected to add 2.9 percentage points (ppts) to the country’s 2020 GDP growth and place the nation on a stronger footing, benefitting from the projected global recovery in 2021.

Tengku Zafrul said the medium-term fiscal strategy will be enumerated in the Fiscal Outlook and Federal Government Revenue Estimate Report which will be issued together with the 2021 budget in October 2020.

“As at end-2019, Malaysia’s net foreign-currency external asset position stood at a sizeable RM924 billion, as 94.5% of external assets were denominated in foreign currency compared to 41.4% of total external liabilities.”

“Together with the flexible exchange rate, these will continue to serve as important buffers against potential external shocks,” he explained.

Tengku Zafrul said about 96% Malaysia’s federal government debts were issued in ringgit, and therefore, not subject to currency mismatches.

Besides, Malaysian banks are now much more resilient compared to previous crises with excess capital buffers standing at RM121 billion — more than three times the buffer during the 2008/09 global financial crisis.

Separately, Inland Revenue Board (IRB) has clarified that approvals of the Bantuan Prihatin Nasional (BPN) are automatically generated based on recorded assessment data income of individuals in 2018. IRB said that in response to reports claiming that some MPs and dignitaries were approved to receive the aid.

In such cases, the revenue collecting agency said it welcomes the MPs who volunteered to refund the BPN payment.

“An initial review found that the process of determining BPN recipients was organised and approved individuals were those whose level of taxable income is in the eligible range of income to receive the BPN,” it said in a statement yesterday.

It was previously reported that some MPs had revealed that they were eligible for BPN aid, which led them to question on the procedures.

IRB said any MPs or other BPN recipients, who wish to refund the financial help, can submit a letter complete with full name and identification number, attach bank draft or cheque to the Accountant General Department of Malaysia and submit it to Finance Ministry’s National Budget Office.