Economist confident Sarawak will recover

Dr Madeline Berma

KUCHING: The recovery in oil prices will provide Sarawak with financial resources for economic recovery in the coming years, said economist Datuk Dr Madeline Berma.

“The oil price recovery after the massive fall in 2020 will have a positive and long-term impact on Sarawak’s economy.

“In addition, with the Moody’s Investors Service changing its outlook on Sarawak’s rating from negative to stable, it reflects Moody’s view that risks to Sarawak credit profile remain consistent with the A3 rating level.

“This development, in return, will be able to attract foreign investors and will be advantageous to Sarawak,” she opined.

Madeline further noted that this development will contribute significantly to Sarawak’s aspiration to become a developed state by the year 2030.

“The ratings and the increase in oil prices will increase Sarawak’s revenue and help Sarawak in its development efforts and post-Covid-19 economic recovery efforts,” she added.

Recently, Moody’s Investors Service has changed the outlook on Sarawak’s rating from negative to stable.

In a statement on Sept 24, it also affirmed the long-term issuer rating at A3 and affirmed Sarawak’s Baseline Credit Assessment (BCA) at Baa1.

According to Moody’s Investors Service’s ratings system, securities are assigned a rating from Aaa to C, with Aaa being the highest quality and C the lowest quality.

It is believed that the change in outlook reflects Moody’s assessment on the recovery in oil prices since the onset of the coronavirus shock, combined with the settlement of the dispute with Petroliam Nasional Bhd (Petronas, A2 stable), and the associated enhanced visibility over the collection of the state’s sales tax on petroleum products.