KUALA LUMPUR, Dec. 8 (Xinhua) -- Fitch Ratings has affirmed Malaysia's long-term foreign-currency issuer default rating (IDR) at "BBB+" with a stable outlook.

The rating agency said in a statement on Monday that the ratings are supported by strong medium-term growth prospects and persistent current account surpluses, with a diversified export base.

These strengths are balanced against high public debt, a lower revenue base, and weaker external liquidity relative to peers. "The stable outlook reflects our expectation that the government debt-to-gross domestic product ratio will decline only gradually over the medium term, underpinned by the government's commitment to fiscal consolidation," it said.

Meanwhile, Fitch expects Malaysia's economy to expand by 4.6 percent in 2025, easing to 4 percent in 2026 and 4.2 percent in 2027.

Firm labor market conditions and rising wages are supporting household spending, with momentum likely to carry into 2026, it noted.

According to Fitch, Malaysia's approved investment projects rose by 13.2 percent year-on-year in the first nine months of 2025, pointing to a strong pipeline, especially in artificial intelligence-related capex, in 2026.

Exports surprised on the upside in 2025 on the global tech upcycle and front-loading, but are likely to soften in 2026 as front-loading fades, it added. ■