The ratings agency also affirmed its 'A' long-term and 'A-1' short-term local currency ratings on Malaysia.
As the Malaysian economy recovers from the pandemic-related slowdown, it believed its medium-term growth prospects are better than most of the other sovereigns at similar income levels. S&P Global Ratings said Malaysia's 2022 growth momentum has continued into 2023 with its first-quarter gross domestic product rising 5.6 per cent year-on-year, underpinned by a further improvement in employment, recovery in tourism activity, and continued capital investments on both private and public fronts.
The ratings agency also said that Malaysia's 2023 budget remains expansionary to support growth momentum and alleviate inflationary pressures. Hence, we forecast Malaysia's net indebtedness to rise by 4.4 per cent of GDP in 2023 versus a 5.0 per cent increase in 2022 on moderately lower general and central government deficits, it said.