The Petronas logo is seen at one of its petrol outlets in Putrajaya outside Kuala Lumpur December 8, 2012. – Reuters picKUALA LUMPUR, Sept 3 — Putrajaya's measures to lower subsidies by letting fuel prices go up are too small to alter the negative outlook on Malaysia's A- sovereign rating, Fitch Ratings said in a statement today.
Instead the international ratings agency said sustained reforms and a broadening of the revenue base through a goods and services tax (GST) would make a difference to the country's credit profile.
"But such an intensification of reforms that can also withstand potential growth headwinds, is not on the cards at present."
Malaysia raised fuel prices for the first time since 2010, joining neighbouring Indonesia in curbing subsidies that have stretched government budgets and threatened investor confidence.
The price of the widely used RON 95 grade of gasoline rose 20 sen to RM2.10 a litre at midnight, after Prime Minister Datuk Seri Najib Razak announced the change yesterday in Putrajaya, outside of Kuala Lumpur. Diesel increased 20 sen to RM2 a litre.