KUALA LUMPUR (July 1): The Malaysian government said Fitch Ratings move to upgrade the country's debt outlook reflected a "fair and balanced" view of policy makers' commitment to sound macroeconomic policies and fiscal reforms.

The Finance Ministry's treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah said the Fitch's ratings acknowledged the structural reforms undertaken by the government. These include subsidy rationalisation and revenue diversification.

“The government remains resolute in strengthening public finances and will stay the course of [the] fiscal consolidation path towards achieving a balanced budget by 2020.

“The government’s transformation programmes have benefited the economy and the rakyat. “These initiatives will be continued through the 11th Malaysia Plan to transform Malaysia into a high-income, inclusive and sustainable economy,” Mohd Irwan said.

In a statement, Fitch said it had maintained its 'A' and 'A-' ratings for Malaysian government debt and upgraded its outlook for the country's long-term issuer default ratings to stable, from negative.

Fitch said it had taken into account the nation's improving financials and economic growth.

Mohd Irwan said the latest evaluation on Malaysia's credit rating indicated the country was economically and financially strong.

This was despite sentiment surrounding government wholly-owned entity 1Malaysia Development Bhd (1MDB).

Mohd Irwan said despite Fitch’s concerns on 1MDB, the clarification on 1MDB's rationalisation plan and options, including asset monetisation, indicated the company would not pose a systemic risk to the financial sector.
 
"In our view, the latest assessment on Malaysia’s credit rating is a recognition of the Government’s continuous efforts in embracing structural reforms to build a sustainable, inclusive and competitive economy. It also reflects the strong economic fundamentals and the sound financial position of the country," he said.