KUALA LUMPUR: Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz has questioned the basis of Fitch Ratings’ possible downgrade on Malaysia given the country’s strong fundamentals.
“When we look at it, against our peers, we are at least as good as or even better in terms of growth prospects and performance because we have a solid financial system, our fiscal position had shown a track record of reduction in deficit and our external debt is relatively low compared with some of our peers.
“The question is - What has been the basis of that outlook?” she said in a plenary session at the Invest Malaysia 2015 conference here today.
Also present were Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar and Khanazah Nasional Bhd managing director Tan Sri Azman Mokhtar.
The two-day conference, which starts today, is jointly organised by Bursa Malaysia and CIMB Group.
On fiscal position, Zeti said, several reforms had been undertaken to improve Malaysia’s position such as subsidy rationalisation, which had generated savings of more than RM20 billion, on top of the implementation of the Goods and Services Tax (GST).
Asked if the GST would hurt domestic demand, which was currently the main driver of the economy, she said there had been some moderation in spending but the impact was cushioned by the lower oil prices.
On the impact of the weakening oil price on the economy, Abdul Wahid said the country’s reliance on its oil and gas revenue, which currently stood at 30 per cent, had been reducing.
“We will continue to lessen our dependence on the sector by diversifying our revenue sources,” he said.
On the 11th Malaysia Plan to be tabled in Dewan Rakyat on May 21, Wahid said the government would announce “several game-changers” which would focus more on inclusive and sustainable components on the economic model. – Bernama