National debt now stands at RM1.24 trillion, says PM

PETALING JAYA: The federal government’s debt has increased by RM66 billion to RM1.24 trillion as of the end of September, compared to RM1.17 trillion at the end of last year, the Dewan Rakyat was told.

Prime Minister Anwar Ibrahim, who is also the finance minister, said the rise in debt is due to the need to finance the fiscal deficit, which is to fund development expenditure.

In a written parliamentary reply, Anwar said the federal government’s total liabilities stood at RM369 billion at the end of June 2024, compared to RM361 billion at the end of 2023.

This includes government guarantees amounting to RM231 billion (2023: RM227 billion) and other liabilities of RM137 billion (2023: RM133 billion).

“As of today, the government has never failed to meet its debt obligations, including repayments and interest, as scheduled,” said Anwar.

“Generally, each year, the government must borrow to finance the fiscal deficit and repay maturing debt due to the continued deficit in the government’s finances.”

He was resplying to Ahmad Amzad Mohamed (PN-Kuala Terengganu) who asked about the country’s debt and liabilities, as well as debt repayment obligations and interest for 2023 and 2024.

Amzad also asked about the government’s strategies in light of the increase in debt and liabilities.

Anwar said several measures are being implemented, including fiscal consolidation measures to ensure that new borrowings are lower compared to the Covid-19 pandemic period.

Anwar said the country’s fiscal deficit has shown a decreasing trend from RM98 billion (6.4% of GDP) in 2021 to RM91 billion (5% of GDP) in 2023.

The fiscal deficit is projected to continue decreasing to RM84.3 billion (4.3% of GDP) in 2024, and RM80 billion (3.8% of GDP) in 2025, said Anwar. He said this is in line with the government’s aim to lower the country’s fiscal deficit to 3% by 2026.

Anwar also said the government is expanding its revenue base by measures such as raising the service tax rate and introducing the e-invoicing system.

He said Putrajaya is optimising public expenditure in various ways. The government is also reviewing the implementation of off-budget projects and limiting the issuance of financial guarantees to 25% of GDP.