S&P doesn’t expect Malaysian fiscal performance to deteriorate

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KUALA LUMPUR (Sept 5): Malaysia’s fiscal performance isn’t expected to deteriorate materially in next few years mainly because of the government’s strong focus on fiscal stability, S&P says in statement.

* Risks to fiscal performance have risen even if the government spends carefully

* Budget performance is more vulnerable to negative economic conditions than most others due to narrow revenue base that is dependent on volatile revenue sources

* Coalition govt’s focus on governance is likely to take a while to benefit the policy and business environments in the country

** Govt decision to change the reporting structure of several important agencies will increase the independence and transparency of government agencies and state-owned enterprises

** For a real change in behavior, Malaysia will have to sustain these reform efforts; it may even widen those measures to the civil service.