KUALA LUMPUR: Fitch Solutions Country Risk and Industry Research has recently predicted that Barisan Nasional (BN) will win the 15th general election.
However, it said there is a "significant likelihood" of a hung parliament.
"We at Fitch Solutions think that there is a more than two-thirds chance of the BN coalition returning to power in Malaysia, but there remains a significant likelihood of a hung parliament.
"In the 2018 elections, BN only won 79 seats out of 222, down from 133 seats in the 2013 federal elections. However, there are signs that the political momentum is now in favour of BN." the article read.
It explained that the outcome of the Melaka and Johor state elections were likely indicators that BN had regained political momentum, adding that it had the advantage of being the longest-ruling coalition in the country.
"This has benefited them both in election promises that they have more actual governing experience over the other political coalitions as well as realistic expectations that they would be able to fulfil their promises once elected," the research arm of US credit rating agency Fitch Solutions said.
The report predicted that Pakatan Harapan or Perikatan Nasional would win by a little less than 25 percent, noting that PH momentum has waned since the 2018 general election.
As for PN, it said, the coalition did poorly in the Melaka and Johor elections, and believes the same will happen in GE15.
"While PH's election promises largely have the same projected positive effects for the economy as BN's, they have also been accused of making populist election promises that do not have long-lasting positives for consumers, such as getting rid of highway toll charges.
"The rural poor are unlikely to use highways on a regular basis and would benefit minimally from this. Instead, it is an indirect burden on the lowest income demographic as the government takes on the additional expenses should toll charges be abolished," it said.
Fitch Solutions Country Risk and Industry Research expects a new BN government to lead to greater state intervention in the economy, including the reintroduction of the goods and services tax (GST) and an expansion of race-based affirmative action.
However, it expects BN to govern "relatively pragmatically" and to keep the government's foreign investment policy intact.
It said bringing back GST would bode well for the nation's medium-term fiscal outlook.
It added that Malaysia's short-term political risk index score stands at 64.8 out of 100, which is near its lowest on record, reflecting elevated political uncertainty, but it expects political stability to return once the new government is formed, reinforced by the "anti-party hopping" bill.
Malaysia will hold its next general elections on Saturday after caretaker Prime Minister Datuk Seri Ismail Sabri Yaakob dissolved the parliament on Oct 10.