Moody’s sees longer-than-expected fiscal consolidation path for MalaysiaKUALA LUMPUR (May 16): Moody's Investors Service anticipates that, despite the government's projected 3.2% fiscal deficit by 2025, Malaysia's consolidation of its fiscal deficit will take longer than three years due to a rigid operating expenditure and difficulties in increasing Putrajaya's revenue base.
“On the expenditure front, I think there is also some risk [to] certain items; specifically on operating expenditures, [they] are rigid in terms of the government’s capacity to be flexible with spending commitments, and these would include things like government salary, pensions, subsidies, and debt services charges,” said Moody’s sovereign risk group analyst Nishad Majmudar.