pic by TMR FILE

THE government’s debt stands at RM979.8 billion as at end-December 2021 or 63.4% of GDP, said Deputy Finance Minister I Datuk Mohd Shahar Abdullah.

The federal government’s statutory debt ratio which includes Malaysian Government Securities, Malaysian Government Investment Issue and Malaysia Islamic Treasury Bills stood at 59.7% from the GDP, which is below the 65% threshold set under the Temporary Measures for Government Financing (Coronavirus Disease 2019 [Covid-19]) (Amendment) 2021.

The deputy minister said the government is currently using the Medium-Term Fiscal Framework as a guide in developing strategies towards a medium-term fiscal consolidation for a period of three to five years, in line with the 12th Malaysia Plan.

“The government is also developing a Medium-Term Revenue Strategy and implementing a public expenditure review to improve the country’s revenue and ensure efficiency in the government’s spending.

“Implementation of these measures are expected to strengthen our financial position to ensure fiscal stability and improve government’s debt capacity in the medium- and long-term,” he said in the Dewan Rakyat yesterday in response to a query from Pontian MP Datuk Seri Ahmad Maslan.

Ahmad had asked the deputy minister to provide the latest data on the country’s economic growth, fiscal position, government debt and methods to reduce deficits and debts, while increasing job opportunities and income for the people.

Mohd Shahar added that the economic recovery in 2021 is expected to support the country’s GDP towards reaching pre-pandemic levels.

“The growth will be driven by the measures outlined in Budget 2022 which are expansive, focus on the normalisation of economic and social activities following the high vaccination rate and the resumption of infrastructure projects with high multiplier effects as well as those with high demands mostly from our main trading partners,” he said.

The government also maintains its GDP growth projection for this year between 5.5% and 6.5% which is in line with the latest projection by the International Monetary Fund and World Bank of 5.7% and 5.8%, respectively.

Meanwhile, Mohd Shahar said 6.3 million people are expected to benefit from the one-off withdrawals of RM10,000 from Employees Provident Fund (EPF) accounts.

“This means that a total of RM63 billion will be channelled to the people and their purchasing power will increase. This will have a direct impact on the economy,” he said to a supplementary question from Pokok Sena MP Datuk Mahfuz Omar.

Mahfuz had asked the deputy minister on the impact the one-off withdrawal would have on the fund.

Mohd Shahar, however, noted that this move would affect EPF’s ability to invest in the short term. Due to that, EPF will rebalance its portfolio to reduce the impact on its investment activities.

Prime Minister Datuk Seri Ismail Sabri Yaakob had announced last week that Malaysians will be allowed to make a special withdrawal of RM10,000 from their EPF accounts after studying the requests received from those who want to make the withdrawals.

This would be the fourth time the government has allowed for the public to tap into their retirement funds due to the impact of Covid-19.