KUALA LUMPUR: Recent positive reports from the World Bank and the International Monetary Fund (IMF) have confirmed Malaysia’s fiscal position as previously reported by the government, says Finance Minister Lim Guan Eng.
He said Malaysia is reported to be making progress on the reform agenda which has seen sustained economic growth, subdued inflation and a current account surplus.
He said the Debt Management Committee Meeting Statement on Dec 6 announced the government’s debt and liabilities relative to gross domestic product (GDP) as at end-June 2019 were 52.6% for direct debt, 10.4% for committed government guarantees and 2.1% for 1Malaysia Development Bhd (1MDB).
“Overall, the government’s debt and liabilities have decreased from 79.3% of GDP at end-2017 to 77.1% of GDP as at end-June 2019.
“This shows the success and commitment of the Pakatan Harapan (PH) government in its debt and liabilities consolidation efforts,” he said in a statement today.
Lim said in the medium term, the government targets to further lower its total debt and liabilities to 65% of GDP by the end of 2025, adding that the fiscal deficit target for 2019 of RM52 bil or 3.4% of GDP will be achieved, as reported by the World Bank and IMF.
“This represents a reduction from the fiscal deficit of 3.7% of GDP in 2018, owing to the government’s successful implementation of open tenders and cost-saving measures.
“Direct debt is expected to increase by RM52 bil in 2019 to fund the country’s development expenditure, which was approved by the Parliament in 2018,” he said.
Aside from direct debt, Lim said the government’s liabilities also include committed government guarantees to implement public transportation and utilities projects including mega infrastructure projects such as Light Rail Transit Line 3, Mass Rapid Transit 2 and Pan Borneo Highway with a total cost exceeding RM75 bil.
In addition, Lim said committed government guarantees have also increased due to scandals unfolded by the PH government after taking over such as the Tabung Haji (TH) issue, whereby the Barisan Nasional government had falsified TH accounts to conceal huge losses and paid high dividends despite zero profits.
Meanwhile, Lim said the international credit rating agencies’ affirmation of Malaysia’s sovereign credit rating at A- or A3 with stable outlook is strong evidence that the PH government is prudent and transparent in the fiscal management of the government.
“The confidence of international bodies and investors refutes irresponsible parties who have distorted facts in order to spread false information about the country’s debt and liabilities position, including false allegations that the Ministry of Finance is selling national assets and land.
“It should be emphasised that I have not approved any sale of national assets and land, which is in fact implemented by other agencies not associated with the Ministry of Finance,” he added. – Dec 20, 2019, Bernama