In 2015, Malaysia’s short-term political risk rating was downgraded twice as a result of the collapse in oil prices. In 2016, over the months, the economy adjusted to external shocks – helped by a flexible Malaysian ringgit – and gradually improved, leading to a first upgrade last August. The country’s short-term debt is now at a lower level whereas foreign exchange reserves are slowly building up on the back of rising exports in key sectors (especially electronics, oil & gas and palm oil) and FDI. Price increases, including the small rebound for hydrocarbons, partly explain the export surge. In a more supportive domestic environment and given the stronger global economic outlook, Credendo has further upgraded the country to the best rating 1/7, i.e. the same risk level as until 2014.