KUALA LUMPUR – There is ample room for the government to stimulate the economy with the current statutory debt ceiling of 60% of gross domestic product, said Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz.
“I feel this debt-to-GDP ratio is sufficient for now. By the end of this year, our debt level is expected to reach 56% of GDP,” he told TV3’s Buletin Utama programme tonight.
The debt-to-GDP ratio is expected to touch 60% next year.
Tengku Zafrul was replying to a question on whether the ceiling should be raised to 65% to strengthen the country’s economy.
He said 1% represents a debt increase of RM15 billion.
“If it is raised to 65% of GDP, that will be an increase of RM75 billion. It (raising the level) really depends on how (well) we fight the Covid-19 pandemic.”
The government recently increased the statutory debt level temporarily to 60% of GDP from 55% previously.
Putrajaya is allocating RM322.5 billion, or 20.6% of GDP, for Budget 2021.
This is an increase from its total expenditure allocation for 2020, which has been revised upwards to RM314.7 billion from the initial estimate of RM297 billion.
The Education Ministry continues to receive the largest allocation at RM50.4 billion, accounting for 15.6% of the total Budget.
RM17 billion will be channelled to the Covid-19 fund, in addition to a RM1 billion special allocation to stem the third wave of the coronavirus. – Bernama, November 8, 2020
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