Federal debt stands at RM685b

by P PREM KUMAR

THE federal government’s debt position stood at RM685.1 billion, or 52.3% of gross domestic product (GDP), as of June 2017, said Prime Minister Datuk Seri Mohd Najib Razak.

Up to 96.7% or RM662.4 billion of that sum was domestic debt, while 3.3% or RM22.7 billion was offshore borrowings, Najib said in a written parliamentary reply yesterday.

“The government remains committed to ensuring the debt level does not surpass the 55% of GDP,” Najib, who is also finance minister, said in response to Kepong MP Dr Tan Seng Giaw, who asked the government to state its current financial position.

According to Najib, the federal government will continue to implement fiscal consolidation measures to ensure its debt remains under control and to reduce the deficit level in stages.

“The fiscal consolidation will soon reduce the government’s need to borrow and subsequently reduce debt level,” he added.

Najib said the Malaysian Government Securities and Malaysian Government Investment Issue have recorded 2.4 times subscription, which reflects strong demand on instruments issued by the government.

He informed that over 74% of the federal government’s debt issuances are subscribed by major local institutional investors such as the Employees Provident Fund, Retirement Fund Inc, banking institutions and insurance firms.

The remaining 25.7% is controlled by asset managers, central banks, governments, retirement funds and financial institutions from the Middle East, Europe and the US.

Meanwhile, in the 2016 Auditor-General’s Report, which was tabled in Dewan Rakyat yesterday, noted that the federal government debts rose to RM649.4 billion in 2016, a 2.8% increase of RM17.9 billion from 2015.