PETALING JAYA: The government is confident that rating agencies will not lower the country’s credit rating, despite concerns over its current debt position.

Finance Minister Lim Guan Eng said that rating agencies are aware of the government’s fiscal position, and that it has to service debts and honour commitments inherited from the previous government.

“Although (rating agencies) have expressed concern, I do not see any (reason) to downgrade the country’s rating.

“I believe that they are aware of the government’s efforts to overcome the fiscal problem left by the previous government.

“They know that this new government is committed and that efforts are underway to ensure that the (new) administration is efficient, accountable and transparent.

“We hope that the agencies will give us some time to settle it, and we (are not even asking) for a long period (to solve the matter). We only ask for three years and not 30 years,” Lim said when met after appearing as a guest on 8TV’s Mandarin News broadcast last night (Nov 8).

On the show, Lim was asked about his visit to rating agencies recently.

He added that the deficit rate is inversely related to the growth in Gross Domestic Product (GDP), hence higher growth will lead to a lower deficit rate.

“What’s important right now is to ensure the people’s socio-economic wellbeing.

“If we can ensure sustainable economic growth, the wellbeing of the people’s socio-economy can be guaranteed,” he added.

During Lim’s tabling of the Pakatan Harapan government’s maiden Budget on Nov 2, he announced a fiscal deficit of 3.4 per cent of GDP for next year, slightly narrower than the latest official estimates of 3.7 per cent for this year. -NST

Najib sarcastically ‘congratulates’ Pakatan over Petronas rating

PETALING JAYA: Former premier Datuk Seri Najib Tun Razak has sarcastically “congratulated” the Pakatan Harapan government over the downgrading of Petronas’ outlook from stable to negative by Moody’s Investors Service.

“Congratulations to the Harapan government … this is the outcome of expert management in running the country’s finances, and smart moves taken in Budget 2019 such as ordering Petronas to pay high dividends to cushion the shortfall in revenue,” Najib said sarcastically in a Facebook post on Thursday (Nov 8).

He also warned that this would impact Malaysia’s credit rating overall.

“This is when oil prices are said to be high and stable. But what if oil prices drop?

“What buffer do we have to cushion an oil crisis, if it happens again?” he said.

He added that the previous administration Barisan Nasional worked hard to reduce the country’s dependence on oil revenue by diversifying resources, in line with current needs and with the world economic development.

“But the PH government wants to go back in time,” said Najib.

Earlier on Thursday, Moody’s affirmed Petronas’ A1 domestic issuer and foreign currency senior unsecured ratings, but changed the outlook from stable to negative.

“The negative outlook on Petronas’ ratings reflects our view that its financial profile may deteriorate if the government continues to ask the company to keep dividend payments high, especially if oil prices decline,” said Moody’s senior vice-president Vikas Halan in a statement on Thursday.

He said such a situation would no longer support a ratings level for the company that was currently two notches above that of the sovereign debt.

Last Friday (Nov 2), Finance Minister Lim Guan Eng announced during the tabling of Budget 2019 that Petronas will make a one-off special dividend of RM30bil which will go towards repaying the Goods and Services Tax (GST) and income tax refunds of RM37bil. – THE STAR