Govt debt ‘ manageable’

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

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.