07/07/2025

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MONDAY | JULY 7, 2025 SCAN ME Malaysia on stronger financial footing

o Economist says measures to reduce fiscal deficit and govt debt yielding results, which is positive for country’s credit ratings outlook

He also cautioned that recent US policy proposals could place further downward pressure on the greenback, citing the US Senate’s proposal involving tax cuts totalling US$4.5 trillion (RM19 trillion), to be funded by reductions in social spending, including healthcare aid programmes, and clean energy subsidies. “The tax cuts mainly benefit high-income earners, who generally have a lower marginal propensity to consume. They tend to spend more on luxury items rather than everyday goods, so the stimulus effect on GDP growth may be limited,” Mohd Afzanizam explained. He warned that, combined with new US tariff measures, the policy could increase business costs and consumer prices, potentially weighing on long-term economic growth. “I believe the US dollar is on a weaker long-term trajectory due to several structural factors,” he concluded. On Friday, the ringgit closed at 4.2180/2260 against the greenback, having appreciated by 5.8% since the beginning of the year.

Transitioning to external factors, Mohd Afzanizam said the global environment has a bearing on Malaysia’s economic outlook, parti cularly developments in the United States. He pointed out that the US is no longer rated triple-A across the board, with current sovereign credit ratings at Aa1 (Moody’s), AA+ (S&P Global Ratings), and AA+ (Fitch Ratings). “This signals that the US government’s ability to manage its debt is not as strong as before. “All three major rating agencies now classify US debt around AA+ or Aa1, reflecting rising concerns over fiscal deficits, mounting debt levels, and political gridlock.” Mohd Afzanizam said the erosion of credit strength reduces the appeal of US assets and accelerates global dedollarisation trends. “Geopolitical tensions are also contributing to this shift, as more countries look to diversify their trade partnerships and reduce reliance on the US dollar.”

progresses. The government allo cated RM13 billion for the STR and Sara programmes in 2025, the highest ever distributed for cash aid in Malaysia, compared to RM10 billion last year,” Mohd Afzanizam said. He further stated that the

KUALA LUMPUR: Malaysia’s fiscal consolidation efforts are beginning to bear fruit, with measures to narrow the deficit and reduce government debt gaining traction despite criticism, signalling a positive outlook for the country’s sovereign credit ratings. “Our foreign reserves have risen to US$119.9 billion (RM507 billion) from US$115.5 billion in the first half of 2025, while foreign ownership of Malaysian Government Securities increased to 35.6% in May from 32% in January. “This reflects a positive view of the government of Malaysia’s credit worthiness,” Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid ( pic ) told Bernama.

Although the country’s fiscal position is improving, with the fiscal deficit narrowing to 4.5% of gross domestic product (GDP) from 5.7% previously, he highlighted that for the rakyat , fiscal consolidation translates to larger alloca tions for government assist ance programmes, in cluding Sumbangan Asas Rahmah (Sara) and Sumbangan Tunai Rahmah (STR). As of the first half of 2025, Malaysia’s fiscal deficit has im proved to RM34 billion, compared to RM46 billion in the same period last year. “The government coffers are improving as fiscal consolidation

number of cash aid reci pients had increased to 5.4 million from the previous 700,000 beneficiaries, which shows that the assistance is now being better targeted rather than being disbursed through blanket subsidies. Mohd Afzanizam noted that this could potentially lead to a more favourable credit review, with Malaysia’s

current sovereign credit ratings standing at A3 (Moody’s), A- (S&P Global Ratings), and BBB+ (Fitch Ratings). “The realignment of subsidies and continued fiscal consolidation will eventually yield positive out comes and improve the govern ment’s financial position,” he added.

TikTok Shop drives SME growth via ‘shoppertainment’

Malaysia Aviation Group acquires 20

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

more A330neo aircraft PETALING JAYA: Malaysia Aviation Group (MAG), the parent company of national carrier Malaysia Airlines, has exercised its purchase rights for 20 additional A330neo aircraft through a direct order with Airbus – re affirming its commitment to a long-term strategy for fleet renewal and network development. With this latest acquisition, Malaysia Airlines is set to become one of the largest A330neo operators in the Asia-Pacific region – strengthening its position as a leading premium airline in one of the world’s fastest-growing travel markets. This new order builds on MAG’s initial commitment in 2022 for 20 A330neo aircraft – comprising 10 directly purchased and 10 leased from Avolon – bringing the group’s total A330neo commitment to 40 aircraft to date. Deliveries from this additional batch are scheduled between 2029 and 2031. In a statement, MAG said the A330neo remains a cornerstone of MAG’s fleet modernisation programme, enabling the group to serve high-growth markets more efficiently while enhancing the overall travel experience. The expanded widebody fleet will enhance connectivity and drive network development across key markets in Asean, China, India, and Australasia – strengthening Malaysia Airlines’ position as a leading premium carrier in the Asia Pacific region. MAG managing director Datuk Captain Izham Ismail said, “The A330neo continues to deliver the right balance of operational efficiency, range, and cabin comfort to support our network and growth strategy.” To date, MAG has taken delivery of four A330neo aircraft, currently operating on selected services to Auckland, Melbourne and Bali. Six more are scheduled for delivery by the end of the year, with the remaining aircraft from the original order set to arrive progressively through to 2028.

PETALING JAYA: TikTok Shop is emerging as a growth driver for Malaysian small and medium enterprises through its social media engage ment and e-commerce combination known as “shoppertainment”. For local creators interviewed by SunBiz , the platform has become a game changer. Pinn Yang, for example, said TikTok Shop finally bridged the gap between content discovery and actual sales conversion. “Before this, even with our strong following, there was no direct way to turn discovery into purchase. With TikTok Shop, we closed that gap,” he said. His team grew from experimenting with live selling to generating over RM3.8 million in sales during the Yang Riang Raya campaign within a year. The secret, he said, lies not just in using the platform, but in the speed of testing, feedback and adaptation. “People think you need a big audience or fancy equipment. But when we started, it was just me, a phone and a ring light. What really matters is consistency and truly understanding what your audience wants.” For Puspa Gomen, TikTok Shop transformed her brand by simplifying the buying process and expanding reach. “Some of my TikTok videos reached up to eight million views, and in just three months, I made almost half a million in sales,” she said. She added that live streams allow buyers to see products in action, ask questions and build trust in real time which are crucial for driving repeat purchases. Eira Syazira, founder of Candyta, echoed the sentiments, calling TikTok Shop a game changer that enabled rapid scaling far beyond traditional retail. In just six months, Candyta saw sales surge, with 35% now coming from returning customers and its follower count multiplying fivefold. Meanwhile, Nabilah Nazib of Sugardoll described TikTok Shop as a pivotal shift from a

From left: Pinn Yang, Puspa Gomen and Syeikh Omar. labour-intensive, agent-based system to a direct-to-consumer model. “Previously, our revenue relied on manual order-taking. Now, sales are driven by content, not manpower. Stock sells out in hours after a viral live,” she said. Beyond reduced acquisition costs and faster sellouts, she noted that genuine, problem solving content matters more than follower count. “This proves that today, scaling a brand is less about team size and more about being visible, relatable and consistent.” Syeikh Omar Sadeq, another creator, saw sales jump two to three times after joining TikTok Shop. “Short videos help build community, while live sessions let us explain products and connect directly. Many customers return because they feel more confident after watching our lives,” he said. Contrary to popular belief, creators said TikTok Shop isn’t just for young shoppers or cheap products.

Premium offerings can succeed too if the story, authenticity and community connection are strong. The latest data on TikTok Shop’s global gross merchandise value (GMV) shows that consumers in Malaysia spent a whopping US$2.724 billion (about RM12.07 billion) in 2024. According to Tabcut.com, TikTok Shop’s GMV in Malaysia grew 104% year-on-year from US$1.3 billion in 2023, making Malaysia one of the platform’s top six markets globally. TikTok Shop is not just expanding rapidly, it is outpacing traditional giants in percentage growth and positioning itself as the second largest platform in the market. Data from ecommercedb.com showed Shopee is leading the Malaysian market with US$7.24 billion in GMV for 2024, followed by TikTok Shop and Taobao. However, Tik-Tok Shop is leading the surge in live and video commerce in Southeast Asia, where players like Shopee and Lazada are playing catch-up.