6 days ago
- Business
- New Straits Times
Anwar assures Parliament debt under control
KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim backed the government's borrowing plan, saying that loans are directed towards the national developments rather than operational expenditure.
Anwar, who is also finance minister, said the national debt remains under control and the figures exclude borrowings by the private sector.
"We are not borrowing for operating expenses. We are borrowing, and at a reduced amount, for development expenditure.
"Why? Because of the condition of our schools, our hospitals, rural areas and flood-prone areas," he told the Dewan Rakyat today.
He was responding to Datuk Iskandar Dzulkarnain Abdul Khalid (PN-Kuala Kangsar) on whether the government has managed the national debt responsibly, given that it has risen from RM1,079.1 billion in 2022 to RM1,247.6 billion by the end of 2024, approaching 65 per cent of the gross domestic product.
Anwar said the government was committed to reducing the fiscal deficit gradually, to ensure national debt levels continue to decrease.
He said the debt rate would increase if the fiscal deficit remains high, adding that it needed to be reduced in stages.
Anwar said the government's fiscal consolidation efforts had already led to a year-on-year decrease in new borrowings from RM100 billion in 2021 to RM76.8 billion in 2024.
"In 2022, the deficit was 5.5 percent until it was reduced to 4.1 per cent in 2024 because our target is to reduce the deficit in phases.
"This step is being implemented in phases because if it is done suddenly, the additional allocation for education, Sumbangan Tunai Rahmah and health will be hampered.
"So, the deficit must be reduced but if we continue to spend wastefully, then the debt will reach too high."
Anwar added that the government's commitment to a responsible fiscal policy had helped boost investor confidence, both foreign and domestic.
"If we make an announcement, we want to implement responsible economic policies. But if the deficit continues to deplete, it is considered irresponsible.
"That is why the deficit must be reduced and this is certainly burdening, meaning that only a firm and courageous government can do it.
