Moody's Investors Service on Wednesday maintained Malaysia's direct government debt at 50.8 percent of gross domestic product (GDP) in 2017, although the new government has introduced some policy uncertainty.

The rating agency said in a report that its assessment of contingent liability risks posed by non-financial sector public institutions has also not changed following some statements by the new government.

Examining the impacts of new policies on Malaysia's credit profile, it recognized that fiscal measures are a particular area of focus, given that the country's high debt burden acts as a credit constraint.

"Consequently, to what extent the new government achieves fiscal deficit consolidation will be vital in gauging the eventual effects on Malaysia's fiscal metrics and credit profile," it said.

On the impact of the new government's removal of the country's goods and services tax (GST), Moody's maintained its stance that in the absence of effective compensatory fiscal measures, this development is credit negative because it increases the government's reliance on oil-related revenue and narrows the tax base.

Moody's estimated that revenue lost from the scrapped tax would measure around 1.1 percent of GDP this year -even with some offsets - and 1.7 percent beyond 2018; further straining Malaysia's fiscal strength.

Moody's also viewed the targeted reintroduction of fuel subsidies as credit negative because subsidies distort market-based pricing mechanisms, and could strain both the fiscal position and the balance of payments while raising the exposure of government revenue to oil price movements.

Commenting on the growth outlook, Moody's said that the change in government will not materially alter growth trends in the near term.

"The removal of the GST could boost private consumption in the short term. However, a review of large infrastructure projects could also result in any pick-up in investment being more spread out than we had previously anticipated," it said.