Fitch Solutions: Malaysia’s economy worsens, finances strained

 

Fitch Solutions, the research arm of Fitch Group, sees a worsening of Malaysia’s economic outlook.

It slashed Malaysia’s forecasted gross domestic product (GDP) growth for this year from 11.5 percent to 10 percent.

It cited “muted private consumption”.

“Employment and wages are likely to once again come under intense pressure, this time with even less scope for fiscal support, given that government finances are already strained and close to the raised debt limit of 60 percent of GDP,” it said.

It added that a decline in GDP growth will further negatively impact the number of available funds needed to strengthen Malaysia’s healthcare system.

This is as Prime Minister Muhyiddin Yassin warned on Jan 11 that the country’s healthcare system was at a breaking point.

Since then, the number of active Covid-19 cases have risen from 28,554 to 48,150 as of yesterday (Jan 31).

Fitch Solutions said the surge in Covid-19 cases will paralyse Malaysia’s healthcare system.

Malaysia had since started integrating its public and private healthcare systems to cope with the pressure.

Fitch Solutions, along with Fitch Ratings, are part of the Fitch Group.

However, Fitch Solutions’ research does not affect Fitch Rating’s assessment of the country’s credit ratings.

In December last year, Fitch Ratings downgraded Malaysia’s credit rating from A- to BBB+, making it more expensive for the country to borrow. - Mkini