KUALA LUMPUR: The new Pakatan Harapan (PH) government has inherited a strong economy, with growth averaging 5.5 per cent over the past eight years, but the country’s high debt burden remains a key credit challenge, said Moody’s Investors Service. “We estimate Malaysia’s debt/gross domestic product (GDP) ratio to be at 50.8 per cent at end-2017, significantly above the 40.1 per cent median for A-rated sovereigns. “Given the government’s limited ability to trim further spending, the deficit and debt burden is expected to hover around current levels,” said Anushka Shah, Moody’s Sovereign Risk Group Vice President/Senior Analyst in a statement today. “This takes into consideration foreign reserves that have steadily inched higher over the past year to touch US$102.9 billion as of end-April 2018. Other buffers, including large domestic institutions which provide a funding pool for local currency debt and current account surpluses act as mitigants,” she said.

Source: New Strait Times May 14, 2018 05:37 UTC