KUALA LUMPUR: Malaysia’s sovereign rating outlook for 2025 could see a positive shift, driven by promising fiscal developments, according to Maybank Investment Bank (Maybank IB). The investment bank noted that the government’s net funding through bonds and bills this year amounts to RM77 billion, after offsetting RM93 billion in maturities, which is nearly RM7 billion lower than the budget deficit of RM84.3 billion or 4.3 percent of gross domestic product (GDP), reaffirmed in October.

According to BERNAMA News Agency, Maybank IB sees potential for an improved rating but stresses that stronger institutional profiles and a positive fiscal surprise are necessary for a positive rating action. The institution highlighted that one of these requirements seems to be met, but sustained performance and further improvements are critical.

Maybank IB indicated that if the fiscal deficit improves by RM7 billion (0.35 percent of GDP) this year and achieves a similar improvement against the 2025 target of 3.8 percent, it w
ould align with the medium-term fiscal plan, though not significantly outperform. The bank described this as an encouraging development, suggesting that if the fiscal deficit surpasses the target by RM7 billion, a positive outlook from SandP, Moody’s, or Fitch on Malaysia’s rating is expected within the next 12-15 months.