S&P keeps Malaysia’s A- rating as economy maintains strong growth momentum
PUTRAJAYA, Sept 29 — S&P Global Ratings has reaffirmed Malaysia’s sovereign credit rating at ‘A-’ with a Stable outlook, citing the economy’s resilience and diversification, sustained growth momentum and continued fiscal consolidation.
The ratings agency expects Malaysia’s economy to expand 5.5 per cent in 2026, following 5.2 per cent growth in 2025 and 5.7 per cent year-on-year growth in the first half of 2026, the Ministry of Finance said.
S&P forecasts average annual growth of five per cent between 2026 and 2029, while Malaysia’s 10-year weighted-average real GDP per capita growth is estimated at 3.7 per cent, above the global median for peers at similar income levels.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said the assessment reflected the government’s efforts under the Ekonomi Madani framework to strengthen fiscal foundations while sustaining growth and protecting the rakyat from external volatility.
“S&P’s assessment that Malaysia’s 10-year weighted-average real GDP per capita growth remains above the global median for peers at similar income levels is encouraging.
“It shows that growth per person has remained strong, while we have continued to protect the rakyat from the impact of external inflationary pressures despite an increasingly challenging global environment,” he added.
S&P attributed the reaffirmation partly to stronger electrical and electronics and semiconductor shipments linked to the global artificial intelligence investment cycle, higher energy exports and buoyant household consumption.
It said Malaysia’s established E&E ecosystem, together with initiatives such as the Ekonomi Madani framework and New Industrial Master Plan 2030, could support longer-term economic expansion.
The agency also noted that Malaysia had emerged as South-east Asia’s leading data-centre investment destination, attracting an estimated RM386 billion in cumulative investment between 2021 and mid-2026.
On fiscal management, S&P recognised Malaysia’s sustained consolidation, with the fiscal deficit narrowing from 6.4 per cent of GDP in 2021 to 3.7 per cent in 2025.
The Public Finance and Fiscal Responsibility Act 2023 was also highlighted as providing a framework for stronger fiscal governance, transparency and risk management, with S&P noting that the legislation has bipartisan support and will guide the country’s medium-term fiscal framework.
Malaysia’s external position remains a source of resilience, supported by its large and diversified export base and a track record of current account surpluses spanning more than two decades, with S&P expecting the surplus to stabilise at around 1.8 per cent of GDP over the next three years.
S&P also assessed Bank Negara Malaysia as having significant independence and strong monetary policy credibility, with inflation expectations remaining well anchored.
Anwar said the government would continue advancing reforms under Ekonomi Madani and the Thirteenth Malaysia Plan 2026-2030, focusing on fiscal sustainability, productivity and competitiveness.
“Our task now is to ensure that stronger growth translates more meaningfully into higher incomes, better opportunities and improved living standards for the rakyat.
“Belanjawan 2027, to be tabled on 9 October 2026, will build on these reforms with further measures to achieve that objective,” he said.
