Malaysia’s fiscal consolidation remains on track, but rating agencies have flagged that the country’s progress is being driven more by spending cuts than stronger revenue growth. While Malaysia has largely met its budget pledges and the economy is resilient against external risks, revenue growth has trailed the pace of economic expansion, Moody’s Ratings senior analyst Christian de Guzman said in reaction to the Budget 2026 announcement. “As such, the gains in fiscal consolidation have not been sufficient to reverse the ongoing deterioration in debt affordability, as measured by interest payments relative to revenue,” he said.
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