PM: ‘New Loan Definitions’ The Reason Debt Tripled
A sharp increase in the country’s debt was noted at the Dewan Rakyat recently. Malaysia’s external debt has spike from RM196bil in the final quarter of 2013 to RM740.7bil in the third quarter of last year.
The Prime Minister Datuk Seri Najib Tun Razak, who is also the Finance Minister, explained that the sharp increase was due to a new definition in debt reporting, which was in use since last year, he said in a written reply.
“The new definition was in line with international debt reporting. This includes external offshore loans, public enterprises and the private sector,” he said to reply to a question by William Leong Jee Keen (PKR-Sepang).
Leong had asked the Finance Ministry to reveal the reason why the country’s external debt stood at RM740.7bil and its impact on the country’s economy.
The Prime Minister also added that the new definition showed the level of Ringgit denominator security debt held by foreigners, which comprised of two-thirds of the increase of external debt.
“This is because of the depth, openness and attractiveness on Malaysia’s financial market,” he added
The Finance Ministry also revealed that the Government’s debt as at December last year stood at RM582.8bil or 54.5% of the country’s Gross Domestic Product (GDP).
“From the total, 97.1% or RM566.1bil was domestic debt, while the remaining RM16.8bil or 2.9% was external debt.
“The Federal Government’s financial debt remains manageable and can be categorised as at a modest position,” he said.
The Government, he said, remains committed to ensure that the debt level remains under the 55% limit of the country’s GDP.