Mohd Irwan: Govt guaranteed debts are ‘manageable’

By DASHVEENJIT KAUR / Pic by ISMAIL CHE RUS

The government’s guaranteed debts are still at a manageable level and below the country’s gross domestic product (GDP), said Treasury Secretary General Tan Sri Dr Mohd Irwan Serigar Abdullah.

“The main thing is that the government’s debt should not exceed 55% of the GDP. Secondly, any offshore borrowings should not exceed RM35 billion.

“Looking at our current numbers, our debt levels are very much manageable,” he said in Putrajaya yesterday.

Questions on the country’s debt sustainability were raised during a townhall session to discuss the Auditor-General’s (A-G) 2016 report.

Mohd Irwan said the country is performing well and the country’s debt at 51.7% is below the government’s self-imposed 55% limit.

In the latest A-G’s report, Putrajaya’s guaranteed debt increased 5% last year, the fourth year in a row debt has risen.
According to the report, the

debts accrued by statutory bodies and companies that were guaranteed by the government increased to RM187.23 billion last year compared to RM177.73 billion in 2015.

The National Higher Education Fund (PTPTN) contributed to the increase as its guaranteed debt increased by 14.6%, while DanaInfra Nasional Bhd, the company created to fund infrastructure projects, recorded a 43.4% jump.

“Whatever we borrow, we borrow for development and expenditure, and not for operating expenditure or to pay civil servants’ salary.

“So, we do make sure that within the government operation, the debts are maintained below 55%,” he said, adding that much of the debts are for infrastructure, PTPTN and Prasarana Malaysia Bhd.

He said Malaysia is a medium-indebted nation compared to other developed nations, who have debts surpassing 100%.

Mohd Irwan said Singapore’s debt to GDP stands at 110.5%. According to Bloomberg data, Greece has a debt-to-GDP ratio of 181.6%, while Japan at 234.7%.

“The government is working to ensure that public debt level remains below 55% of GDP.

“The government will take measures to ensure our spending is not more than our income. We will also ensure that the loans are used to grow the economy,” he added.