‘DEBT-TO-GDP RATIO WORSE IN DR M’S TIME’

In 5 years, ratio rose from 44pc to 103.4pc, says BN man

FERNANDO FONG KUALA LUMPUR news@nst.com.my

THE government’s debtto-gross domestic product (GDP) ratio was worse during Tun Dr Mahathir Mohamad’s tenure as prime minister.

A low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay back debts without incurring further debt.

Barisan Nasional strategic communications deputy director Eric See-To said when Dr Mahathir first became prime minister, the debt-to-GDP ratio was 44 per cent.

But within five years during his premiership, the ratio had risen to 103.4 per cent.

“Dr Mahathir and the opposition often criticised that the government debt is too high under Datuk Seri Najib Razak’s administration and that the nation would go bankrupt.

See-To said at the end of the third quarter this year, the debtto-GDP ratio had reduced to 50.7 per cent.

“Dr Mahathir supporters should ask how is it then that Malaysia can go bankrupt at (a debt-toGDP ratio) of 50.7 per cent when the nation did not go bankrupt at 103.4 per cent,” he said in a posting on his Facebook page yesterday.

See-To explained that debt must be viewed in comparison to the annual income.

Citing an example, he said an individual who owed RM22,000 but with an annual income of RM20,000 was less secure compared with an individual with a RM50,000 debt but had an income of RM100,000 a year.

“At a glance, it may seem that the second individual’s debt of RM50,000 is more than two-fold compared with the debt of the first individual but the second individual is more secure.”