I hope everyone has read the recent outlook downgrade from S&P Global Ratings for Malaysia’s sovereign rating? You missed it? It’s ok, I shall write about it today. The revision was not because of our successful effort (all of us) against COVID-19. It was also not because of the recent PENJANA which has helped stirred up the market a little. It was also not what the Finance Minister said (must not simple say anything which does not help the market) or what Bank Negara Malaysia (BNM) did to our overnight policy rate (OPR). BNM will have another policy meeting next week and there may be another decision on our OPR. Read an earlier article here. Lower or Higher both have its own advantages and disadvantages.
Article in thesundaily.my S&P Global Ratings Asia-Pacific sovereign & international public finance ratings director & lead analyst, Andrew Wood said that the revision of the outlook to negative was because of the impact of Malaysia’s current political situation. It has affected clarity in terms of policymaking, particularly on the fiscal side of things over the next two to three years.
He said, “There could very well be some significant differences between the Pakatan Harapan (PH) aligned government might take versus a Perikatan Nasional aligned government, especially with regard to revenue-generating measures and those that might replace the zero-rated GST programme, over the next two years, especially when the economy recovers.” Please do read the full report in the article yeah. Article in thesundaily.my
Before everyone start panicking, please note that our sovereign rating remains under Investment category. It is rated at A- by S&P Global and we maintained the same ‘Investment’ grade rating by all other international rating agencies too. In brief, economically, our country is still doing okay. Could have been better, definitely but at the moment, just enough. Now, with regards to the POLITICAL issue (which is the MAIN thing affecting the outlook revision from stable to negative), I think it’s time all the politicians who said they love Malaysia to really love Malaysia and do something positive about it yeah. You know who lah.
To all other Malaysians, happy travelling within Malaysia while at the same time staying safe by wearing masks and practise social distancing. We can do it together to prevent that never ending ‘second wave’ prediction by many friends on FB.
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