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KUALA LUMPUR: The government’s total debt and passive exposures are estimated at RM1,257 trillion, or 87.3% of Gross Domestic Product (GDP), as of the end of September 2020, said II Deputy Finance Minister Mohd Shahar Abdullah.
Federal debt at the end of September stood at RM 874.3 billion, or 60.7 percent of GDP, it said.
“However, according to the legal limit calculations, the federal debt, comprising Malaysian Government Securities (MGS), Malaysian Government Issues (MGII) and Malaysian Islamic Treasury Bills (MITB), represented only 56.6% of GDP, which is less than the 60% limit was recently set, ”he said today during Dewan Rakyat’s session.
He was responding to questions from Amanah Chairman Mohamad Sabu (PH-Kota Raja) about the current position of government debt and the debt-to-GDP ratio.
“The government is committed to ensuring that the refinancing of its debts is implemented in an orderly manner as scheduled,” said Mohd Shahar.
In view of the prolonged Covid-19 pandemic crisis, he said, the government will focus on economic recovery, especially to safeguard the well-being of the people and support business activities.
Mohd Shahar said that once the economy has recovered, the government will re-implement fiscal consolidation measures to ensure that the federal government’s debt exposures and financial liabilities remain well controlled and manageable.
The measures would include expanding the revenue base, strengthening tax administration and enforcement and increasing spending efficiency to contain the federal deficit level, he explained.
“Therefore, it will reduce the government’s dependence on loans and curb exposure to the debt and financial liability of the federal government,” added Mohd Shahar. -Called
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