Fed­eral govt debt of RM655.7b at end-June this year, or 53.2% of GDP

The Sun (Malaysia) - - SUNBIZ -

THE fed­eral gov­ern­ment debt stood at RM655.7 bil­lion at end-June 2016 or 53.2% of gross do­mes­tic prod­uct (GDP), mainly due to higher do­mes­tic debt is­suance to fi­nance devel­op­ment ex­pen­di­ture. This com­pares with RM630.54 bil­lion in 2015.

Do­mes­tic debt con­tin­ued to ac­count for the largest share of to­tal debt at 95.9%, while the re­main­ing is from off­shore bor­row­ings.

Mean­while, Malaysia’s ex­ter­nal debt stood at RM848.2 bil­lion as at end-June 2016, rep­re­sent­ing 68.8% of GDP.

The fed­eral gov­ern­ment main­tains its fund­ing mainly from do­mes­tic sources, which is ex­pected to con­sti­tute 93.2% of to­tal gross bor­row­ings. This helps to lessen the im­pact of ad­verse ex­change rate move­ments on debt val­u­a­tion and debt ser­vic­ing.

For 2016, to­tal fed­eral gov­ern­ment gross bor­row­ings are es­ti­mated at RM92.8 bil­lion mainly for prin­ci­pal re­pay­ment amount­ing to RM53.3 bil­lion, while the bal­ance is for deficit fi­nanc­ing.

Gross do­mes­tic bor­row­ings for 2016 are ex­pected to be RM86.5 bil­lion. Malaysian gov­ern­ment se­cu­ri­ties re­main the ma­jor source of do­mes­tic fund­ing, amount­ing to RM44 bil­lion or 50.9% while the bal­ance is from Malaysian gov­ern­ment in­vest­ment is­sues.

The bulk of the debt com­prised de­posits and ring­git-de­nom­i­nated debt se­cu­ri­ties held by non-res­i­dents at RM309.6 bil­lion or 25.1% of GDP, fol­lowed by pri­vate sec­tor debt at RM166.7 bil­lion or 13.5% of GDP.

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