KUALA LUMPUR: Moody's Investors Service said Malaysia’s resilient economic growth, deep domestic capital markets, large international asset position and large export proceeds mitigate the sovereign's vulnerability to sudden shocks.
The agency also believes Malaysia will be able to maintain its strong growth trends.
“In particular, the country's highly diversified and competitive economic structure underpins stable and relatively robust growth trends that have proven to be resilient to external headwinds,” it said.
The economy's long-term potential growth should stay robust at around five per cent, which would be significantly stronger than most other A-rated sovereigns, Moody’s added.
Moody's analysis is contained in its recently-released report titled "Government of Malaysia: FAQ on credit resilience to high leverage and external vulnerability risks".
Although Malaysia's household debt levels, while stable pose downside risks to growth, Moody’s said such debt does not pose material threats to financial stability.
“Households have large liquid financial assets to buffer the impact of a potential shock to debt servicing capacity.
“Moreover, ongoing macroprudential measures will help contain potential further increases in debt,” it said.