S&P Global Ratings has affirmed Malaysia's 'A-' long-term and 'A-2' short-term foreign-currency sovereign credit ratings with a stable outlook, according to a recent statement.

The rating agency also affirmed the country's long-term and short-term local-currency ratings at 'A' and 'A-1', respectively.

S&P said Malaysia's diversified economy is benefiting from the AI investment cycle and elevated energy prices, while political stability supports policymaking.

The rating agency forecasts GDP growth of 5.5% in 2026, after 5.2% in 2025, while the fiscal deficit is expected to narrow to 3.1% of GDP from 3.3%.

S&P said downside risks include weaker political stability, slower per-capita growth, geopolitical tensions and global trade policy uncertainties.