KUALA LUMPUR, July 7 (Xinhua) -- Although some reforms measures carried out by Malaysia's new government led by Prime Minister Mahathir Mohamad raised uncertainties in the country's fiscal position, analysts here are generally positive on the economic outlook in the first half of its 100 days reforms.

The economic reforms included the removal of government service tax (GST) and re-introduction of fuel subsidy, among others.

"The long term outlook could be looking positive after clearing some inefficient usage of government's resources in the past, resulting in better governance," said Hong Leong Investment Bank in a report Friday.

The victory by Pakatan Harapan in the 14th general election (GE14) took the market by surprise last month and triggered some sell-off by foreign investors in Malaysia's equities and bonds.

The country's national debt, which is said to have spiked to 1 trillion ringgit (247.6 billion U.S. dollars), negative news flow on the 1MDB scandal, slowdown in construction sector after the new government review construction of mega projects and lower revenue following GST "zeroization" have weighed on the market sentiment.

While abolishing the GST has led to a revenue loss of 21 billion ringgit, the Malaysian government has also announced series of expenditure rationalization exercise which is projected to save 10 billion ringgit.

"We are of the view that the government is on the right path in addressing the country's financial position and economic well being, rather than by merely being a change in administration. We believe that legal and regulatory reforms will be addressed, and thus setting Malaysia on a right footing once again," Affin Hwang Capital Research said in its recent report.

"On the whole, we nevertheless remain mid to longer term positive and believe that the on-going reforms coupled with a more-transparent government with the right policies will steer the country in the right direction," it said.

It is also confident that the country's economic growth could receive a boost longer term while the positive changes could overall lead to an improvement in the investment climate.

"What we have seen from the new government is a push towards greater transparency and accountability, with the unravelling of the excesses of the previous administration," said KAF Investment Bank in its recent report.

To the foreign research house, Malaysia's new government has been moving fast to address the market concerns by embracing greater fiscal discipline and tighter controls over government spending.

In addition to the public expenditure cut, the new government expects the reintroduction of sales and services tax (SST) in September to bring in revenue of 4 billion ringgit. It also expects higher dividends from government linked companies of 5 billion ringgit, and extra income of 5.4 billion ringgit due to higher oil price.

"Malaysia's near-term growth and economic fundamentals remain sound - and provide a solid foundation for the government to move forward with its agenda. Economic growth is expected to remain strong at a rate of 5.4 percent in 2018," Mara Warwick, the World Bank's country director for Malaysia, Philippines and Thailand said recently.

As a highly open trade-oriented economy at the center of the world's fastest growing region, Malaysia continues to benefit from robust global demand for its exports, she said.

Last week, S&P Global Ratings has reaffirmed Malaysia's "A-/A-2" foreign currency and "A/A-1" local currency ratings, with stable outlook.

"We expect that Malaysia's core credit strengths, including its robust external position and highly credible monetary policy settings, will continue to support the rating following the recent change in government," it said.

"The stable outlook balances Malaysia's strong net external position, above-average growth performance, and track record of monetary flexibility against the risks inherent in the ongoing political transition and its sizable government debt stock," it said. (1 U.S. dollar equals to 4.04 Malaysian ringgit)