KUALA LUMPUR, March 23 — Prime Minister Datuk Seri Najib Tun Razak has reiterated that a claim that the country is going bankrupt is baseless.

"The highest debt level was recorded in 1986 when the national debt ratio then was 103.4 per cent of the country’s GDP (Gross Domestic Product). Today, our debt to GDP ratio is just 50.8 per cent.

"This means that as a government we have been prudent and responsible,” Najib, who is also Finance Minister, said during a dialogue in conjunction with the National Transformation Programme (NTP) Annual Report 2017 Review here tonight.

The dialogue was facilitated by Datuk Seri Idris Jala, the Adviser to the Prime Minister for the NTP.

"If we were to look at the debt ratio of other countries, for examples, Japan is 240 per cent of GDP, Singapore 111 per cent and the United Kingdom 89 per cent

"Logically, these countries should go bankrupt first, instead of Malaysia. Not us. Hence, a claim that Malaysia will go bankrupt is utterly baseless," he said.

Besides, the Malaysian economy’s bright prospects had been validated by global institutions, and major credit ratings agencies had reaffirmed Malaysia’s rating within the "A” band with a stable outlook.

Malaysia is one of the few countries in the world to put a statutory limit on government debt, further demonstrating the government’s tenacity and discipline to institutionalise reforms.

The government’s debt of 50.8 per cent of GDP in 2017, safely below the self-imposed debt ceiling of 55 per cent of GDP.

On the Goods and Services Tax (GST) and removal of fuel subsidies that are said to be the main issue contributing to the rising cost of living, Najib said: "Actually the price increase is not just due to GST.”

"Because when we implement GST, we provided for a soft landing. That’s why we have excluded 578 items, especially basic items such as rice, chicken, eggs, fish, vegetables, breads, cooking oils, fruits, books, medicines from GST.”

Malaysia’s GST rate is at 6 per cent.

In Malaysia’s history, the inflation rate reached the highest level in 2008 and 1998.

For example in July 2008, the country’s inflation hit 8.4 per cent, but since the GST was introduced, the inflation rate was at 2.1 per cent in 2015, 2.1 per cent in 2016 and 3.7 per cent in 2017.

In February 2018, the inflation rate reduced to 1.4 per cent.

"So, if we want to say that GST is not right. It is far-fetched that the price of ikan kembong (Indian mackerel) has gone up due to GST as fish are not subject to GST.

"So all these hearsays are not based on facts,” said Najib.

"The GST is not a new issue. In 1984, the government at that time wanted to implement GST. But it did not have the political courage to do GST because it is a right decision but there will be a political cost

"But we are willing to bear the political cost because it is the right thing to do because it will benefit the rakyat and the country, in the long run. I am convinced,” said the Prime Minister. — Bernama