KUALA LUMPUR, Dec 6 — Malaysia's direct debt increased RM94.1 billion by the middle of the year, Finance Minister Lim Guan Eng said to deny claims that this increased by RM245 billion.
Following the Debt Management Committee meeting on December 2 to discuss the action plan on the government's debts and liabilities, he said the government remains committed fiscally responsible policies.
“The ministry would also like to rectify the public's misconception regarding the foreign debt. which is different from the government's direct debt. Foreign debt consists of offshore loans, non-resident deposits, and individual, company and government debts held by non-residents. In contrast, direct debt is issued by the government,” Lim said in a statement.
According to Bank Negara Malaysia, Malaysia's total external debt was RM931.1 billion at the end of June this year. Of that value, only RM190 billion was direct debt.
The minister added that direct debt rose RM94.1 billion since Pakatan Harapan took power.
“The RM94.1 billion has gone on to fund development expenditure, fiscal deficit, and debt repayment, including that of 1MDB. This amount is far different than the claims made by irresponsible parties that direct debt has increased by as much as RM245 billion.
“1MDB's debt including interest amounts to RM50.5 billion and will only be fully repaid by 2039. Up to RM13.9 billion will have to be spent to pay 1MDB and SRC International Sdn Bhd's debts from 2017 to 2020,” he said.
Lim said the government is targeting to reduce the debt ratio in the medium-term to 65 per cent as a ratio of the GDP by the end of 2025, from 77.1 per cent at the end of June this year.
“The committee has verified the 2020 Federal Government Loan Programme, including the option to issue another samurai bond. In addition, the government has analysed its new and existing guarantees, as well as the latest best practices in evaluating and monitoring unexpected liabilities via the use of financial technology,” he said.