KUALA LUMPUR: According to Moody’s Investors Service, Malaysia, Indonesia, and Turkiye will overtake Saudi Arabia. As the leading sovereign issuers in 2023–2024. Which had the highest proportion of long-term sovereign sukuk issuances over the previous six years.
Although budget deficits have been modestly reducing. The rating agency anticipates Malaysia and Indonesia to contribute the most, in part due to increased and ongoing sukuk refinancing needs.
According to a research, “Malaysia’s fiscal deficit is anticipated to decrease to roughly 5% of the gross domestic product (GDP) in 2023-2024 from 6% in 2022. But will remain large enough to support annual sovereign sukuk issuance of US$20bil-US$22bil (RM90.4bil-RM99.5bil) in both years.
No significant changes in fiscal policy are anticipated under the incoming administration of Prime Minister Datuk Seri Anwar. Who is likely to maintain large fiscal deficits through 2024 in order to support economic recovery, according to Moody’s.
Considering that approximately half of the gross government financing will be satisfied by sukuk issuances. It was stated that this would maintain reasonably high levels of gross sukuk issuance.
According to Moody’s, the Prime Minister unveiled a number of policies in his first Budget 2023. Which was presented on February 24, 2023, to encourage further development of Islamic finance.