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Kota Kinabalu: Malaysia’s rating has been upgraded from "underweight" to "neutral" by the world’s leading financial institution.

JPMorgan Head of Asia-Pacific (ex-Japan/China) equity strategy Rajiv Batra said the positive decision is due to policy reforms, data centre investments and infrastructure buildout happening in Malaysia.

He said the 4.2% GDP growth in the first quarter of 2024 and 10-11% earnings growth mean they need to give credit to Malaysia and hence the rating upgrade.

“We are seeing the government walk the talk,” Rajiv said on Squawk Box, CNBC’s business news programme.

When asked how the government managed to sell the implementation of a decrease in subsidies to the population, he explained that cash assistance has been offered.

“The people also realise that the money saved on subsidies will be used for productive economic purposes, be it in literacy, re-skilling people, or the progressive wage policies, which Malaysia has tried to take inspiration from Singapore,” he said.

Meanwhile, Rajiv said Malaysia’s foreign investment, which started low this year like other Asean countries, has quickly recovered.

“We are seeing they are going into the EVs, green energy, and now even solar energy; so, taking all these factors into account, foreign investors are now seeing multiple sectors and ideas to play over there,” he said.