JP Morgan’s rating upgrade a plus point for PM Anwar’s govt
University Malaya Centre for Democracy and Elections lecturer Associate Professor Dr Awang Azman Awang Pawi stated that the ruling coalition might use JP Morgan’s decision to upgrade Malaysia’s ratings from underweight to neutral as a way to bolster its political position.
“The ruling coalition might leverage this upgrade to strengthen its political position, presenting it as a validation of its policies.
“This could be a significant talking point in upcoming elections or political campaigns,” he told Harapan Daily.
Dr Awang suggested the rating upgrade could give the government more political capital to pursue previously risky or unpopular reforms.
“With the boost in confidence from the rating upgrade, the government might have more political capital to implement reforms that were previously considered risky or unpopular,” he said.
He added that the government may introduce new initiatives to attract foreign direct investment (FDI), leveraging the improved rating as a selling point for international investors.
He further said the rating upgrade can enhance the credibility of the current government, suggesting improved economic management and stability.
“This could bolster public and investor confidence in the administration,” he said.
Prof James Chin, Professor of Asian Studies at the University of Tasmania said that the improved rating is not going to change the overall political dynamics between the opposition and the government.
“The reason is they are all gearing up for the by-election in Nenggiri.
“The by-election is coming up, so it is not going to change anything,” he said when contacted by Harapan Daily.
He thinks Economy Minister Rafizi Ramli will assert that his economic policies have laid the groundwork for a stronger economy.
“I think Rafizi will claim that all the plans he put in place laid the foundation for a more robust economy and that this is the first sign that the international community is applauding his moves.
“So, I suppose he can argue that this is an affirmation by the international financial community that what he is doing is the right thing and that he has support, at least from the international community, to carry on his economic policy,” he said.
Malaysia’s upgraded ratings indicate expectations of continued growth
Political Analyst Dr Ahmad Zaharuddin Sani Ahmad Sabri said the fact that Malaysia’s upgraded ratings indicates expectations of continued growth.
“A study by the Asian Development Bank Institute found a positive correlation between economic growth and political stability in Southeast Asian countries, including Malaysia,” he said to Harapan Daily.
He also said the rating upgrade might encourage the government to accelerate these reforms outlined in the 12th Malaysia Plan (2021-2025) which will maintain investor confidence.
“For instance, the plan targets to increase the contribution of small and medium enterprises (SMEs) to GDP from 38.2% in 2020 to 45% by 2025,” he said.
He also said the rating upgrade might lead to an increased focus on sectors they’ve highlighted as promising.
“For example, the electrical and electronics (E&E) sector contributed 6.8% to GDP in 2021, according to the Department of Statistics Malaysia.
“The government might introduce new policies or incentives to further boost such key sectors,” he said.
Recently JPMorgan elevated Malaysia’s financial rating from “underweight” to “neutral” for the first time in nearly six years.