2 days ago
Household financial assets are double debt levels, Dewan Rakyat told
KUALA LUMPUR: Malaysia's household financial assets remain robust, standing at 2.1 times more than total household debt, the Dewan Rakyat was told.
This is despite debt levels reaching RM1.65 trillion, equivalent to 84.3% of the nation's gross domestic product (GDP), as at the end of March, said Deputy Finance Minister Lim Hui Ying.
She added that while household debt levels are significant, they must be assessed alongside the size of financial assets owned.
'Household debt must be viewed in tandem with financial assets, which are substantially larger.
'In aggregate, household financial assets continue to exceed debt by 2.1 times, providing a strong buffer for households,' she told Datuk Awang Hashim (PN-Pendang) who asked about Malaysia's high debt-to-GDP ratio.
In a reply to Datuk Ngeh Koo Ham (PH-Beruas), Lim added that the government remains committed to optimising public expenditure.
She said this will be achieved through subsidy rationalisation, a review of statutory bodies and a comprehensive reassessment of government spending as part of broader fiscal management efforts.
Among the measures being pursued are the gradual implementation of fiscal consolidation, broadening the revenue base and ensuring sustainable revenue collection, she added.
'Government borrowings are strictly for financing development expenditure projects and programmes that generate long-term returns for the nation and its people,' she said.
Lim pointed out that the government has capped financial guarantee exposure at 25% of GDP under the Public Finance and Fiscal Responsibility Act 2023 to ensure exposure remains within limits aligned with current economic and fiscal capacity.
In addition, she said, the government is prioritising user-pay projects through the 2030 Public-Private Partnership Master Plan (Pikas 2030) to reduce the fiscal burden.
She added that the government is also reviewing the use of off-budget mechanisms for project implementation and will only consider development projects that fall within the scope and ceiling of the country's five-year Malaysia Plans.
Lim also highlighted that key national strategies – including the National Energy Transition Roadmap (NETR), the New Industrial Master Plan 2030 (NIMP 2030), the Governance, Empowerment and Accountability Reform-Up (GEAR-uP) programme and policy enhancements such as minimum wage adjustments – are expected to stimulate economic activity, strengthen government revenue and reduce reliance on borrowing.
'The government is also committed to implementing institutional reforms to support national development, including the tabling of the Government Procurement Bill aimed at improving procurement processes and governance,' she said.
This includes drafting legislation related to government-linked companies (GLCs) to enhance corporate governance, improve accountability and optimise GLC performance, she added.
