Govt debt ‘ man­age­able’

> It has not ex­ceeded limit of 55% of GDP, says PM

The Sun (Malaysia) - - NEWS WITHOUT BORDERS - BY KAREN ARUKESAMY

KUALA LUMPUR: The fed­eral govern­ment debt re­mains at a mod­er­ate and man­age­able level and has not ex­ceeded the self­im­posed thresh­old of 55% of Gross Do­mes­tic Prod­uct (GDP).

Prime Min­is­ter Datuk Seri Na­jib Ab­dul Razak said as of June 2016, the debt was RM655.7 bil­lion, which is 53.2% of GDP.

He said from the to­tal, RM628.8 bil­lion (95.9%) was do­mes­tic debt while RM26.9 bil­lion (4.1%) was off­shore bor­row­ings.

Na­jib was re­spond­ing to Datuk Noor Eh­sanud­din Mohd Harun Nar­rashid (BN-Kota Tinggi) dur­ing min­is­te­rial ques­tion time at the De­wan Rakyat yes­ter­day.

Noor Eh­sanud­din had asked the govern­ment to state the fed­eral govern­ment’s lat­est debt po­si­tion and govern­ment guar­an­tees.

Na­jib, who is also fi­nance min­is­ter and had tabled the 2017 Bud­get on Fri­day, said the bor­row­ings were aimed at meet­ing deficits that arose as a re­sult of lack of rev­enue to fi­nance govern­ment de­vel­op­ment ex­pen­di­ture.

“This de­vel­op­ment ex­pen­di­ture that is met by the loans is pro­duc­tive ex­pen­di­ture that can but­tress eco­nomic growth and bring ben­e­fit to the peo­ple, through the con­struc­tion of schools, hos­pi­tals, roads and dams,” he said.

He added the de­vel­op­ment ex­pen­di­ture and re­sult­ing pro­grammes and eco­nomic ac­tiv­i­ties also in­di­rectly ben­e­fit the pri­vate sec­tor.

Na­jib said the amount of guar­an­tees pro­vided by the govern­ment up to June 2016 stood at RM180.9 bil­lion or 14.7% of GDP.

“The guar­an­tees are given to pub­lic en­ti­ties such as Prasarana and the Na­tional Higher Ed­u­ca­tion Fund Cor­po­ra­tion that im­ple­ment in­fras­truc­ture projects such as the LRT and MRT and the pro­vi­sion of stu­dent loans for higher ed­u­ca­tion,” he said.

He re­it­er­ated that the govern­ment re­mains com­mit­ted to en­sur­ing the debt level does not ex­ceed 55% of GDP.

Re­spond­ing to a sup­ple­men­tary ques­tion on govern­ment mea­sures to avoid spi­ralling debt, Na­jib said the govern­ment would strive to en­sure its ex­pen­di­ture did not ex­ceed rev­enue and that it would have a sur­plus in terms of the cur­rent ac­count.

“We must en­sure the loans are used to de­velop the econ­omy and en­hance eco­nomic ac­tiv­i­ties.

“We also give pri­or­ity to do­mes­tic bor­row­ings and with such mea­sures, in­clud­ing pru­dent, ef­fi­cient and ef­fec­tive spend­ing that fo­cuses on the out­comes, God will­ing, we can man­age the na­tional debt and keep it un­der con­trol,” he said.

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