It said the current and any subsequent waves of infections will delay, but not materially hinder, the economy’s eventual return to high growth rates.

“The authorities’ track record of effective macroeconomic policies, including prudent fiscal policies, has also continued to lengthen, despite ongoing noise in the political landscape,” the rating agency said in a statement today.

However, it said upward pressure on the rating would develop if prospects for fiscal consolidation were to improve significantly.

Moody’s said further enhancements to the institutional framework to raise governance standards and to result in increased policy credibility and effectiveness, including in the management of public finances and boosting Malaysia’s potential growth, would also be credit positive.

Volatile politics that undermine the credibility and effectiveness of institutions, and threaten the stability of capital flows would be credit negative, it said.