KUALA LUMPUR – The definition of statutory debt has not changed since 2009, said Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz.
“The types of debt calculated under this statutory limit are under the act adopted by the government since 2009, not my translation alone,” he said in a Facebook post while presenting the 46th Laksana, or Implementation and Coordination Unit Between National Agencies, report today.
He reiterated that the statutory debt limit has not yet exceeded the 60% ceiling, and the total debt for the three government-issued instruments as at end-December 2020 was 58% of gross domestic product.
At end-February, the total debt was 54% of GDP, and is expected to reach 58.5% this year.
“In a normal economic situation, the government needs to balance between spending for the people and the national debt ratio,” said Tengku Zafrul.
“However, when the country is in an economic crisis, then the need for spending for the people will be greater, causing the debt level to also increase.”
Although the debt level has risen following Putrajaya’s injection of RM340 billion into the economy through a series of stimulus packages, he said, it has not exceeded the statutory limit.
The Finance Ministry will continue to monitor Malaysia’s debt to ensure that it is under control, so as to maintain the confidence of investors and international agencies, he said.
Without their confidence, the people will see a lack of jobs and business opportunities, among other negative effects, he said.
“Debt can be good debt, as well as bad debt. Good debt is like loans that we take to cover the cost of initiatives to help the people and save jobs.
“Loans to develop infrastructure for the people, such as highways and other public facilities, are also examples of good debt. What is bad debt? Bad debt is debt that does not bring any economic benefits or benefits to the people.”
Tengku Zafrul said some of the debt that the government has to manage today is legacy debt.
“Although such debt is not made by the current government, we still have to manage it. The effect is huge, but we are trying to manage it.”
However, it is no excuse for the government not to spend for the people, he said. – Bernama, March 24, 2021
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