FEDERAL GOVERNMENT DEBT COULD BE FULLY SETTLED IN YEAR 2053 - MINISTRY OF FINANCE

FEDERAL GOVERNMENT DEBT COULD BE FULLY SETTLED IN YEAR 2053 - MINISTRY OF FINANCE 

@Jackie San

KUALA LUMPUR (March 30, 2023): The federal government’s debt is expected to be fully settled in 2053 if no new loans were to be taken to finance the deficit and to refinance maturing debts from 2024 onwards, said the Finance Ministry (MoF).

According to the ministry, the federal government’s debt at end-2022 amounted to RM1,079.6 billion, or 60.4 per cent of the gross domestic product (GDP).

Of this amount, domestic debts totalled RM1,050.1 billion while offshore loans amounted to RM29.5 billion.

If the government’s exposure to other liabilities were to be taken into consideration, the federal government’s total debt and liabilities at end-2022 would be RM1.45 trillion, or 80.9 per cent of GDP.

This amount includes federal government debt (RM1,079.6 billion), guaranteed commitments (RM205.9 billion), 1MDB (RM18.2 billion), and other liabilities (RM142.2 billion).

“The government is always committed to ensuring that debt service charges (DSC) are carried out according to the set schedule.

“This DSC is allocated as liability item T13, which is one of the liability expenses that is first given priority over other expenditure items, as stipulated under Article 98(1)(b) of the Federal Constitution, which means that all debt charges are under the responsibility of the federal government,” MoF said in a written reply on the Parliament’s website today.

MoF was replying to a question from Pang Hok Liong (PH-Labis) who wanted to know about the national debt level.

Commenting further, the ministry said the DSC includes annual interest payments on the federal government’s accumulated debts and other management costs related to the issuance of debt papers.

The DSC in 2018 reached RM30.5 billion, RM32.9 billion in 2019, RM34.5 billion in 2020, and RM38.1 billion in 2021.

The government’s DSC for 2022 amounted to RM41.3 billion, MoF added.

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@Jackie San