THE nation continues to grapple with the financial legacy of the 1Malaysia Development Bhd (1MDB) scandal, with Prime Minister Datuk Seri Anwar Ibrahim confirming that the debt remains the country’s largest fiscal liability, amounting to nearly RM50 billion, including RM17 billion in interest.
Addressing lawmakers during Prime Minister’s Question Time in the Dewan Rakyat on Tuesday, Anwar outlined the government’s ongoing efforts to manage the debt, which was inherited in 2018.
“The largest remaining debt is still the 1MDB debt, which has been inherited since 2018, amounting to RM34 billion.
“This includes interest commitments of RM17 billion, bringing the total 1MDB debt to almost RM50 billion,” he said, highlighting that RM42 billion has already been paid and RM29 billion recovered through coordinated action by agencies such as the National Audit Department, the Finance Ministry, and the Malaysian Anti-Corruption Commission.
“However, we still face pressure from around RM13 billion in remaining 1MDB debt, a balance that we must settle,” Anwar added, emphasising that the government remains committed to fulfilling its obligations without compromising essential public services.
Addressing recent claims that Malaysia’s debt had exceeded statutory limits, Anwar warned against misinterpretation of statistics.
“Yes, these numbers have indeed been distorted, which is why statistics should not lie. However, there are situations where statistics can be manipulated to mislead,” he said, stressing that any measures to reduce debt must carefully balance fiscal responsibility with the need to fund critical infrastructure, education, healthcare, and disaster mitigation projects.
The Prime Minister clarified that total federal debt currently stands at RM1.3155 trillion, with statutory government debt at 64 per cent of GDP, safely below the statutory ceiling of 65 per cent. Offshore borrowings remain at RM22.4 billion, under the 35 per cent limit, while treasury bills total RM4 billion, significantly below the RM10 billion cap.
“The new debt was RM100 billion in 2021, and currently, it is around RM70 to 75 billion. That is the rate of reduction,” Anwar explained, citing ongoing fiscal consolidation measures.
Anwar, who also serves as finance minister, highlighted the Public Finance and Fiscal Responsibility Act 2023 as a key instrument in strengthening fiscal governance.
The legislation sets a medium-term deficit target of three per cent and a debt ratio of 60 per cent.
“The deficit has indeed decreased to five per cent in 2023, 4.1 per cent in 2024, and 3.8 per cent this year. Our projections indicate a continued decline,” he said, noting additional measures including targeted subsidies and the Public-Private Partnership Master Plan aimed at reducing government liabilities.
Projecting forward, Anwar said that if current fiscal trends continue, the pressure of national debt is expected to ease by 2028 or 2029.
“Our projections for 2027 and 2028 show a plateau. Hence, measures to reduce the deficit must be implemented without delay,” he stated.
The Prime Minister’s remarks underscore the government’s focus on transparency and prudent management of Malaysia’s finances amid lingering public scrutiny over the 1MDB saga, highlighting both progress made and the challenges that remain in stabilising the nation’s fiscal position. - December 2, 2025
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