Bangkok--13 Mar--Moody's Investors Service Moody's Investors Service says that its A3 sovereign bond rating for Malaysia and its stable outlook remain unaffected by the outcome of the country's March 8 elections, which resulted in a sharper-than-expected drop in support for the ruling Barisan Nasional coalition. "The financial market turbulence that followed the election outcome should not affect Malaysia's credit fundamentals," says Aninda Mitra, a Vice President/Senior Analyst with Moody's Sovereign Risk Unit. "The government's ratings reflect the country's relatively strong growth and external payments position as well as its high savings rate and relatively well-developed regulatory and financial institutions," says Mitra, who is based in Singapore. "Some of these strengths have, however, been supported by a sustained, pro-cyclical fiscal policy that has kept key government debt ratios above those of Malaysia's peers," adds Mitra. "Malaysia's new emergent political dynamic, wherein the position of Barisan Nasional has experienced an erosion, may lead to a policy shift, but it is too early to get a reading on the post-election policy framework, including how it applies to planned regional infrastructure projects and development zones, or whether the economy will be affected," says Mitra. Nonetheless, Moody's says that over the medium-term the election results could result in a much more competitive political environment and a further maturation of the political system away from the country's post-Independence ethnic-based system. In this new competitive era of Malaysian politics, heightened recourse to market mechanisms for the allocation of resources and public goods may prompt more private sector dynamism that, in turn, could support a scaling back of the government's role in the economy, Mitra says. Singapore Aninda S. Mitra Vice President - Senior Analyst Sovereign Risk Unit Moody's Singapore Pte Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (65) 6398-8308 Singapore Thomas J. Byrne Senior Vice President - Regional Credit Officer Sovereign Risk Unit Moody's Singapore Pte Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (65) 6398-8308