KUALA LUMPUR, May 21 — Umno Youth vice chief Khairul Azwan Harun has disputed Prime Minister Tun Dr Mahathir Mohamad’s assertion that the federal debt level has passed the RM1 trillion mark, saying it was "too good to be true”.

Azwan, a senator, insisted that the national debt level was half the amount or at RM686.8 billion if going by the "proper definition”. He then said Bank Negara had confirmed this in its 2017 report.

"If we follow the definition of national debt by world standards, Malaysia’s national debt is actually RM686.8 billion,” he said in a statement.

"This is confirmed by Bank Negara’s December 2017 Report.”

National debt is defined as the total debt a government owes either to domestic or foreign creditors. It does not include government-guaranteed debts.

The Malaysian government's external debt rose to RM883.4billion or 65.3 per cent of GDP as at end-December 2017, according to Bank Negara data released in February.

In the same report, the central bank noted that the external debt level remains manageable. Up to a third of foreign debt holdings are held in ringgit.

Media reports in recent months had purported external debt accounted for only a third of total debt, the rest are owed to domestic lenders.

The latter situation typically carries less risk even if the amount of debt appears huge, some economists have argued.

Dr Mahathir said this morning the country is saddled with over RM1 trillion in debt, blaming it on the alleged abuse of the previous government led by former protege Datuk Seri Najib Razak who now faces domestic graft investigations.

It is uncertain if Dr Mahathir had referred to a figure that included or excluded government-guaranteed debts.

However, Azwan said Dr Mahathir’s assertion suggested a bleak outlook of the economy, which he argued was wrong.

"Bank Negara Report in March 2018 showed that Malaysia’s domestic economy is doing well,” he said.

"Malaysia’s economy is expected to grow at a firm pace of between 5.5 to 6 per cent in 2018.

"Where did the Prime Minister receive the RM1 trillion figure? Did his new advisers fail to provide him with the correct information?

Azwan then asked if the amount was intended as a political blame-game tactic.

"Is it to make the public think that the imminent national debt of the Pakatan Harapan government is the fault of the previous administration?”

The prime minister’s office was not available for comments.