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PETALING JAYA: DAP’s Liew Chin Tong says the annual budget was the reason for the downgrade of Malaysia’s sovereign rating yesterday.
In a statement, Liew said that the “weaker-than-expected” budget, released a few weeks ago, was too conservative from a fiscal point of view to ensure a strong economic recovery and avoid the decline in the country’s credit rating.
Due to the downgrade, he noted that Malaysia’s borrowing costs will increase, creating economic restrictions for investment.
“All along it was clear that this budget cycle would require unconventional thinking, given the high economic cost of the pandemic.
“The budget should have focused solely on doing what is right for our economy, rather than trying to comply with the opaque and arbitrary rules of the rating agencies.
“That opportunity was lost, and ordinary Malaysians now risk having to pay the price,” he said.
Yesterday, the US credit rating agency Fitch Ratings had lowered Malaysia’s sovereign rating from “A-” to “BBB +”, with an improved outlook from negative to stable.
Finance Minister Tengku Zafrul Aziz responded by saying that the government was disappointed with the result of the rating, adding that the downgrade was driven by the impact of the Covid-19 pandemic on Malaysia’s fiscal position and the domestic political situation. .
