KUALA LUMPUR (Oct 4): Fitch Solutions Country Risk and Industry Research said Malaysia will continue to face heightened political uncertainty until after the elections.

In a report on Monday (Oct 3), the firm maintained its Short-Term Political Risk Index score for Malaysia at 64.8 out of 100.

It said while the passage of the anti-party hopping bill in July is positive for political stability, the general election could still be brought forward to as early as November, creating heightened uncertainty for policy continuity in the near term.

Fitch Solutions said the ruling coalition led by the Barisan Nasional remains motivated to call early elections in order to capitalise on its earlier victories in the Johor and Malacca by-elections, but there is no guarantee that they will be able to win a simple majority or form the government.

“Although the passage of a landmark bill on July 28 to curb ‘party-hopping’ is positive for political stability in Malaysia, we at Fitch Solutions are keeping the country’s Short-Term Political Risk Index score at 64.8 (out of 100) for now, given the upcoming general election.

“Polls which must be held by September 2023 could be brought forward to as early as November 2022, even though Prime Minister Datuk Seri Ismail Sabri Yaakob said on Sept 26 that he has yet to decide when to dissolve Parliament to pave the way for Malaysia’s 15th general election (GE15).

“Regardless of the timing, we expect that the outcome of the elections will remain unpredictable, and we continue to flag elevated risks to policy continuity over the coming quarters,” it said.

Fitch Solutions expects uncertainty over policy continuity in Malaysia to persist until after the general election.

It said the largest party in the ruling coalition, Umno, has been pushing for early elections in order to capitalise on their earlier victories in the Malacca and Johor state elections held in November 2021 and March 2022, respectively.

Despite that, it is far from guaranteed that Umno and its coalition partners in BN can win a simple majority of 112 seats to form the government at the upcoming GE15.

It said that indeed, Ismail Sabri expressed concerns on Aug 21 over the possibility of a hung Parliament after the GE15 and stated that there could be a need for a new alliance to be formed among certain political parties depending on the number of seats won by the different parties.