The total amount of Malaysia’s federal government debt has now soared to a whopping RM1.2 trillion as of the end of April this year, the Dewan Rakyat heard yesterday (Jul 16).
This astronomical amount was announced by prime minister Anwar Ibrahim via a parliamentary written reply, who added that the debt amount had increased from RM1.17 trillion at the end of 2023, reported NST.
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The revealing of the staggering number comes after Kuala Terengganu MP Ahmad Amzad Mohamed sought for an explanation behind the increase in federal government debt during the first four months of 2024.
In response, Anwar said the government had taken gross loans amounting to RM70.5 billion, which included the issuance of Malaysian Government Securities (RM30 billion), Government Investment Issues (RM34.5 billion) and Malaysian Treasury Bills (RM6 billion).
These loan receipts were used to repay matured debts amounting to RM20.6 billion, with the remaining RM49.9 billion used to cover the deficit and future maturing debts.
Anwar, who is also Finance Minister, added that another reason for the rise in government debt was due to the need to borrow to finance the fiscal deficit, which is used to fund development expenditure (DE).
He also said the borrowings are expected to contribute to the increase of government debt as long as the government remains in deficit.
Despite the ballooning debt, Anwar said the government is working towards maintaining a fiscal consolidation trajectory with a deficit reduction in 2023 to 5% of Gross Domestic Product (GDP) or RM91.4 billion compared to 5.6% in 2022 (RM99.5 billion).
“As for the fiscal deficit in 2024, it is slated to slide down to 4.3% of GDP or RM85.4 billion. This will help improve public financial position and further reduce the debt burden in the medium and long term,” he explained.
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