PETALING JAYA: DAP’s Liew Chin Tong says the annual budget was the reason for the downgrade in Malaysia’s sovereign rating yesterday.
In a statement, Liew said the “weaker-than-hoped-for” budget, tabled a few weeks back, was too fiscally conservative to ensure a strong economic recovery and prevent the drop in the country’s credit rating.
Due to the downgrade, he noted that Malaysia’s borrowing costs will increase, leading to economic investment constraints.
“It was clear all along 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 was right for our economy, instead of trying to abide by the opaque and arbitrary rules of the rating agencies.
“That opportunity was missed, and ordinary Malaysians now risk being left to pay the price,” he said.
Yesterday, US credit rating agency Fitch Ratings had dropped Malaysia’s sovereign rating from “A-” to “BBB+”, with an improved outlook from negative to stable.
Finance Minister Tengku Zafrul Aziz had responded by saying the government was disappointed with the rating outcome, adding that the downgrade was driven by the impact of the Covid-19 pandemic on Malaysia’s fiscal position and the domestic political situation.