Govt succeeds in reducing new debt

New Straits Times

4 days ago

PUTRAJAYA: Prime Minister Datuk Seri Anwar Ibrahim said the government has succeeded in reducing annual new debt to RM77 billion in 2024 from RM99 billion in 2022.
This, he said, fulfils the government's commitment to more prudent fiscal management, with only the interest payments on old debts yet to be reduced.
"The new debt that the government has incurred was RM99 billion in 2022, dropping to RM93 billion in 2023, and in 2024 the total is RM77 billion... that is less.
"They say the total amount (of debt) is more, added with the old debt and the interest that we have to pay, but I said the government promised to reduce new debt – we have fulfilled that.
"But what is being spread around... we are increasing (the debt), so it is as if we are deceiving the people. If you look at these figures, who is deceiving?" he said when speaking at the Prime Minister's Department monthly assembly here today.
Anwar, who is also the Finance Minister, said annual new debt had been successfully reduced in line with the drop in the fiscal deficit, while giving the commitment that the government would continue reducing the deficit in stages and responsibly, without affecting national development.
He said the government had reduced the country's fiscal deficit from 5.5 per cent in 2022 to 4.1 per cent in 2024, with a target of 3.8 per cent for this year.
He explained that the government had opted for a gradual approach so that deficit reduction would not come at the expense of development needs or market confidence.
"We took over in 2022. The fiscal deficit at that time was 5.5 per cent. What is a deficit? It means spending exceeds national income, which means we are in debt.
"We manage the national economy like a household economy. If the income is RM5,000 but the expenditure is RM7,000, that is a deficit.
"So now we are reducing the expenditure to RM6,500, RM6,000, RM5,500. If it drops suddenly, then (development) cannot proceed," he said.
The Prime Minister also praised the civil service for its contributions that helped Malaysia jump 11 places in the IMD World Competitiveness Ranking 2025 to 23rd position, up from 34th in 2024, driven by improved economic performance and administrative efficiency.
In June, the Ministry of Investment, Trade and Industry (MITI) announced that Malaysia had achieved its best performance since 2020 in the World Competitiveness Ranking (WCR), reflecting progressive momentum in the country's economic recovery and reform agenda.
MITI said Malaysia is on track to be among the world's 12 most competitive economies by 2033, in line with the MADANI Economy Framework.
Anwar added that the International Monetary Fund, in its Article IV consultation for 2025, had praised Malaysia's commitment to implementing fiscal reforms, including the Public Finance and Fiscal Responsibility Act (FRA).
"What does that mean? It means the Finance Minister has handed over some of his powers to Parliament to assess if the target has been met," he said.
— BERNAMA