KUALA LUMPUR – Household debt may have inched up in the first half of the year, but the government believes borrowings remain manageable.
Malaysian households owed RM1.26 trillion as of end-June, or 87.5% of gross domestic product, said the Finance Ministry in its Economic Outlook 2021 today.
This 4% rise from RM1.22 trillion in the same period last year has been attributed by the ministry to a sharp contraction in GDP in the first half of 2020.
Despite the uptick, household debt “is expected to remain manageable, supported by programmes to rein in the debt level and measures enacted to cushion the impact of the Covid-19 pandemic on the economy”, said the ministry.
The bulk of the debt comprises loans for the purchase of residential properties (55.9%), followed by personal use (14.2%) and passenger cars (12%).
The ministry added that total household assets for the period under review are valued at RM2.75 trillion, with growth in household financial assets continuing to outpace that of debt. – The Vibes, November 6, 2020
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