PETALING JAYA: Finance Minister Tengku Zafrul Aziz has questioned Pakatan Harapan’s stand on credit ratings after his predecessor, Lim Guan Eng, criticised Putrajaya over the Fitch ratings’ downgrade.
Earlier today, Lim, the DAP secretary-general, said the finance ministry’s lack of spending in next year’s budget had put the country in an awkward position.
He said Malaysia was not spending enough to help the people and had also failed to impress credit rating agencies with its fiscal consolidation.
In his statement today, Tengku Zafrul questioned Lim’s priorities, asking him to choose between the Fitch ratings and the people of Malaysia.
“Yesterday, they asked the government to not focus so much on debt and fiscal ratings, but now they’re criticising the government for the downgrade.”
Previously, Tengku Zafrul said opposition leader Anwar Ibrahim said the ratings’ downgrade was not a priority compared to economic growth while Lim encouraged Putrajaya to spend more to combat the pandemic as fiscal deficits were inevitable.
Tengku Zafrul also acknowledged the impact of political instability on Fitch’s downgrade but said Putrajaya’s efforts have not gone unnoticed.
“PH has always called our economic projections of 6.5% – 7.5% for 2021 overly optimistic, but Fitch’s own estimation stands at 6.7%.
“Other institutions such as the IMF (International Monetary Fund) have projected a growth of up to 7.8%. “
He said this indicated general confidence in Malaysia’s ability to bounce back from its economic setbacks.
Additionally, despite the downgrade, Fitch’s ratings on Malaysia’s economic outlook have turned from “negative” to “stable”.
He said Malaysia was not the only country whose Fitch ratings have been downgraded.