Malaysia to relax debt limit

Pic by BERNAMA

MALAYSIA’S statutory debt ceiling is expected to be further relaxed to support the economic recovery plans based on the country’s indebtedness affordability.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz (picture) said Malaysia’s statutory debt level has reached 56.8%, below the limit of 60% GDP.

“With limited fiscal space, the government has no choice but to optimise existing funding sources through rationalisation of expenditure, increase in revenue from the government’s ecosystem including the use of National Trust Fund (KWAN) funds and be ready to raise the ceiling limit of the Covid19 Fund (KWC-19),” Tengku Zafrul told Dewan Rakyat yesterday.

As of June 30, a total of RM55 billion has been spent, of which RM38 billion was from the Covid-19 fund last year.Tengku Zafrul said the government is ready to relax the debt limit to support economic recovery plans based on indebtedness capacity.

“The government will table it at the next Parliament session for amendments,” he said.

Meanwhile, Tengku Zafrul estimated lower GDP growth for 2021 compared to the initial forecast of 6% to 7.5% due to the Movement Control Order (MCO).

“With the recent implementation of MCO 3.0, the country suffered a GDP loss of about RM1.1 billion a day, compared to a loss of about RM2.4 billion during the full MCO in March last year,” Tengku Zafrul added.

During the meeting, the finance minister also noted that the government has provided various other financial and non-financial assistance to the people throughout the Covid-19 pandemic.

“The first payment of i-Citra will be made to the Employees Provident Fund (EPF) members whose applications have been approved starting next Tuesday which is expected to benefit four million EPF members,” stated Tengku Zafrul.

Additionally, the six-month loan moratorium application was opened earlier this month for individuals, micro-enterprises and affected small and medium enterprises.