Malaysia's Debt Burden is Also Alarming

Malaysia's debt burden is also alarming.

In fact, it is projected to be around 64% of GDP as at end-2024 – only one percent away from the 65% statutory debt limit, according to the Ministry of Finance in their Fiscal Outlook and Federal Government Revenue Estimates Report as reported by The Edge Malaysia.

At 64% of GDP, the federal government debt is estimated to be RM1.263 trillion, higher than RM1.147 trillion (62%) in 2023 and RM1.079 trillion (60.3%) in 2022. 

The report said the increase in the federal government debt is for the financing of strategic development projects under the 12th Malaysia Plan, among others, the flood mitigation programme, the Central Spine Road (CSR), the Pan Borneo Sabah and Sarawak highways, the Rapid Transit System Link (RTS Link) project between Johor Bahru and Singapore as well as the National Fiberisation and Connectivity Plan (Jendela).

Already, the Yang di-Pertuan Agong, Sultan Ibrahim (right) in his inaugural address to the Dewan Rakyat yesterday had said he was disappointed ("berasa keweca") with Malaysia’s growing debt levels, adding that this was caused by Putrajaya perpetually being in a deficit position since 1998.

The Agong declared that he will vet government’s expenditures to ensure that every proposed spending is really necessary. And he expressed his wish that during his rule, the government will achieve a fiscal surplus every year.

We don't need to be an economist to know that the government should prioritise productive investments to ensure sustainable fiscal management and reduce public debt while carefully avoiding wasteful spending.

No matter how much we deny, rising levels of government debt are, after all, a symptom of an ailing economy.