Moody's Keeps Malaysia Rating at A3 While Flagging Rising Risks for Indonesia

Moody's Ratings confirmed Malaysia’s sovereign credit rating at A3 with a stable outlook, highlighting the country’s stronger fiscal position, higher-than‑projected revenue collections and an economic outlook that should accelerate in 2026. The agency noted the government’s capacity to sustain strategic investments and to cushion the impact of global economic uncertainty.

In a separate assessment, Moody's warned that Indonesia faces heightened policy uncertainty and fiscal‑sustainability risks. The outlook has shifted slightly more negative after the agency downgraded Indonesia’s rating outlook in February, citing increased subsidies, a narrow revenue base and unclear mandates for the new raw‑material export agency Danantara. While the regulator has trimmed the free‑lunch programme budget and is reviewing spending, Moody's says further fiscal expansion without revenue reforms would exacerbate downside risks.