Fitch Ratings said that if Malaysia's government debt as a share of GDP continues to decline due to fiscal consolidation or strong GDP growth prospects, the country's BBB+ rating may face upward pressure. Fitch said in a statement on Tuesday that government debt will continue to gradually fall, supported by nominal GDP growth and established deficit reduction plans. Fitch expects the debt share to fall from 77.3% in 2025 to around 74% in 2027. Note: The Malaysian government plans to narrow the deficit to 3.3% of GDP next year. The 2026 budget deficit was raised to 3.6%, compared to the original target of 3.5%.

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