Time for Malaysians to get used to 'gov't loans come down can also mean national debt goes up'

Focus Malaysia

30-07-2025

SUCH seems to be the mind-boggling Economics 101 situation confronting main-on-the-street Malaysians after it was revealed yesterday (July 29) that the Federal government's debt rose to RM1.3 tril as of end-June 2025, up from RM1.25 tril as of end-2024.
The increase was apparently driven by borrowings to finance fiscal obligations and fund development projects, according to Deputy Finance Minister Lim Hui Ying.
'Government loans are used prudently to finance strategic development projects such as infrastructure, education, health and social protection programmes,' she told the Dewan Rakyat yesterday (July 29) in response to a parliamentary question by DAP's Beruas MP Datuk Ngeh Koo Ham' on the government's effort to reduce federal debts and liabilities.
However, the government's liabilities shrank to RM384.6 bil by March 2025 compared with RM384.8 bil as of end-2024.
To ordinary Malaysians, this piece of news came as a shocker for just over the weekend (July 27), Prime Minister Datuk Seri Anwar Ibrahim had personally warned that unchecked national debt could burden future generation of Malaysians, stressing his government's duty to rein in borrowing before it spirals further.
He went on to stress that his persistent warnings about national debt were driven by a responsibility to prevent the burden from being inherited by future generations.
As Malaysia's debt level remains high, PMX who is also the Finance Minister further justified that managing it responsibly is crucial to restoring investor confidence and safeguarding the country's economic future.
'Bullets for opposition'
Above all else, both the Information Department and PKR Youth were found blowing the trumpet on the Madani government's behalf by citing PMX boastfully announced that 'new debts have been successfully reduced to RM77 bil in 2024 from RM93 bil (2023) RM99 bil (2022)'.
𝙆𝙀𝙍𝘼𝙅𝘼𝘼𝙉 𝘽𝙀𝙍𝙅𝘼𝙔𝘼 𝙆𝙐𝙍𝘼𝙉𝙂𝙆𝘼𝙉 𝙃𝙐𝙏𝘼𝙉𝙂 𝘽𝘼𝙃𝘼𝙍𝙐 𝙉𝙀𝙂𝘼𝙍𝘼
📉 Hutang baharu negara:
• 2022: RM99 bilion
• 2023: RM93 bilion
• 2024: RM77 bilion
1/2 pic.twitter.com/1gRu4UUJwg
— AMK Malaysia (@AMKMalaysia) July 21, 2025
📉 Hutang Baharu Negara Berkurang! 💪🇲🇾
🗣️ YAB Dato' Seri Anwar Ibrahim:
💵 Hutang baharu 2024 turun ke RM77 bilion.
📉 Berbanding RM99 bilion pada tahun 2022!
🎯 Tanda komitmen kerajaan untuk:
✅ Urus kewangan negara secara berhemat.
📊 Kawal defisit, stabilkan ekonomi. pic.twitter.com/1P7rvHz0N9
— Jabatan Penerangan Malaysia ❤️🇲🇾 (@JPenerangan) July 22, 2025
Inevitably, unless the Madani government's communications machinery can find a way to explain in layman's term differentials between PMX's narrative of government borrowings have come down vs soaring national debt level, financially-savvy detractors will surely prey on the latest revelation for political mileage.
'Today the PH (Pakatan Harapan) government admitted that the government's debt has reached RM1.3 tril,' penned former UMNO supreme council member Isham Jalil on his Facebook post.
'In the past six months alone, they have added RM50 bil in debt. They said it was for project spending. Once again, I ask, can you please list the projects above RM100 mil that you spent and who got these projects?
Added the once special officer to incarcerated former premier Datuk Seri Najib Razak: 'And was it obtained through open tender, selected tender or direct negotiation? Where has the hundreds of billions that you borrowed over the past two-and-a-half years gone to? The rakyat will have to pay these debts later.'
Interestingly, another former Najib 'lieutenant' Datuk Eric See-To also took a jibe at the Madani government that ''shall not add' means 'to add RM290 bil' over a period of 30 months'.
'Tidak akan tambah' bermaksud 'tambah RM290 bilion dalam tempoh 30 bulan'.
Dec 2022 (sebelum Madani):
– Hutang langsung: RM1.079.6b
– Liabiliti Kerajaan: RM319.6b
– Jumlah hutang & liabiliti Kerajaan = RM1.399 trilion
Jun 2025 (lepas 30 bulan Madani):
– Hutang langsung:… pic.twitter.com/NCX2fGV5kv
— Eric SeeTo Lim Sian See (@LimSianSeeEric) July 29, 2025
But the former Barisan Nasional (BN) strategic communication deputy director who also goes by the nom de plume Lim Sian See was checkmated by a seemingly neutral governance critic.
'Eric, twisting the numbers won't change the facts. If you want to play propaganda, let's have some basis,' argued ksampoh@MyOwn Inc (@ksampoh).
'Debt is rising? Yes. But not for pink diamonds, luxury ships or condos. This time it's going up because we want to take care of the people, continue the nation's operations and absorb the global impact.
'Eric, if you're really smart, don't just make noise on Twitter but offer a solution.'
By the way, the learned commenter further 'counter-swiped' See-To on the need 'to add RM378 bil over the next nine years (to the national debt) to offset 1MDB, SRC, Aabar & other fraudulent investments'. – July 30, 2025