National debt at RM685b, up by almost a fifth

The Ministry of Finance (MOF) revealed that national debt as of June 2017 stood at RM685.1 billion, — Reuters pic
The Ministry of Finance (MOF) revealed that national debt as of June 2017 stood at RM685.1 billion, — Reuters pic

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KUALA LUMPUR, Nov 2 ― Federal debt as of June 2017 stood at RM685.1 billion, the Ministry of Finance (MOF) revealed today, up by almost a fifth from March last year.

But the country's debt-to-gross domestic product (GDP) ratio is currently at 50.9 per cent, or three per cent lower over the same period, likely due to increased projected earnings.

Local borrowings formed 97 per cent or RM662.4 billion of total debt. The country's foreign borrowing stood at RM22.7 billion or 1.7 per cent of GDP.

“Our debt remains manageable and has been categorised as moderate,” MOF said in a written reply to DAP’s Seputeh MP Teresa Kok.

Domestic investors, led by Bank Bank Negara Malaysia and other banking institutions, held up to RM496.2 billion in government securities or 72.4 per cent of total debt.

Pension fund Employee’s Provident Funds's share stood second highest at 27.2 per cent followed by insurance companies at 4.5 per cent, statutory pension funds at 3.5 per cent, developmental financial institutions at 3 per cent, and followed by others.

Rating agencies and market analysts have previously raised the alarm about the country's staggering debt.

Last year's borrowings stood close to the government's self-imposed 55 per cent ceiling.

MOF said today the government remains committed to keep its debt level low and vowed to continue with more fiscal consolidation measures to help cut future borrowings.

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