KUALA LUMPUR, June 29 — Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz hinted today at the possibility of raising the statutory debt ceiling amid growing appeals for the government to inject more money into an economy hit by a fresh round of Covid-19 containment measures.
Zafrul said some of the money to fund the RM10 billion in cash aid to be given under the Pemulih relief package announced yesterday will come from more borrowing, underlying Putrajaya’s preparedness to raise credit.
“Whether we will cross the 50 per cent debt ceiling, I think that we will be studying it depending on the GDP forecast as we look at the debt-to-GDP numbers,” he told reporters at a press conference held online this afternoon.
“Because the 50 per cent (threshold) will be affected if the GDP numbers are lower than we expect; of course, the borrowing is also expected to go up,” the minister added.
“If there is a need to go to Parliament, of course, we will definitely go to Parliament to get this in line with what we need to do for the rakyat.”
The Perikatan Nasional government has been criticised for what detractors felt to be an inadequate financial response to the prolonged public health crisis, which is threatening to shutter more businesses and force many out of jobs.
Yesterday, Prime Minister Tan Sri Muhyiddin Yassin announced Pemulih, the latest relief Covid-19 package totalling RM150 billion as a response to the latest round of tight restrictions enforced under the National Recovery Plan.
From the total, RM10 billion will be channelled directly into the pockets of lower and middle income households.
Tengku Zafrul said the fund would come from “optimising” government expenditure, increasing investment yields and borrowing.
The Perikatan Nasional government had previously allocated RM380 billion in aid, wage subsidies and grants through seven relief and stimulus packages to keep the economy from tanking.
Zafrul said the large spending has forced the government to revise its deficit-reduction commitment, which is expected to reach beyond the initial six per cent target.
