Malaysia likely to call early elections following Barisan Nasional victories: Fitch Solutions

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GENERAL elections in Malaysia will likely be called well ahead of the September 2023 deadline, according to a report by Fitch Solutions Country Risk and Industry Research released on Wednesday (Jun 22).

Fitch Solutions expects that the general elections will be conducted in the second half of this year, after the Barisan Nasional (BN) coalition, headed by the United Malays National Organisation (Umno), commanded decisive victories in the November 2021 by-election in Malacca state and Johor state's by-election on Mar 12, 2022.

In the Johor by-election, BN won 40 out of 56 seats and secured a 71.4 per cent super-majority in the state legislature.

"The BN coalition will likely want to capitalise on this momentum in order to regain its former dominant position in Malaysian politics," the report said.

In 2018, the BN coalition was defeated after 61 years of rule by the Pakatan Harapan coalition. The Malaysian government is currently made up of a group consisting of Umno, Parti Pribumi Bersatu Malaysia (Bersatu) and Parti Islam Se-Malaysia (PAS), though they do not form a proper coalition. 

Fitch Solutions has maintained its Short-Term Political Risk Index score for Malaysia at 64.4 out of 100 to reflect "the uncertainty associated with policymaking and policy continuity".

A series of unstable governments with thin majorities have stalled the political progress since 2020, Fitch solutions said. It is hopeful that policymaking will improve in Malaysia in the medium term, if BN manages to secure a stronger majority and form the next government. 

However, risks from internal schisms within Umno also remain, which could threaten the coalition's victory at the prospective general election.

There appears to be 2 main factions: those supporting members of the current government led by Prime Minister Ismail Sabri and those who support former Prime Minister Najib Razak and his allies, including Umno president Ahmad Zahid Hamidi, Fitch Solutions said.

"We see risks of disagreements over which faction will lead Umno and BN into the elections and over the eventual makeup of a BN Cabinet should they win."

The next few months are also expected to be "less favourable" for policymaking, as the government changes gears to focus on campaigning.

"Once the election has passed, we may revise these sub-component scores to reflect the new political dynamics," Fitch Solutions said.

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