KAJANG, July 20 – Prime Minister Datuk Seri Anwar Ibrahim stated on Monday that claims of rising federal liabilities are mathematically incorrect. He confirmed that the fresh Malaysia national debt rate has actually declined under recent fiscal management measures. Consequently, treasury officials are pushing forward with strict fiscal deficit reduction goals to stabilize the economy.
Legacy Scandals Keep Malaysia National Debt Aggregated
Speaking during a town hall session at Universiti Islam Selangor, Anwar clarified how government accounting functions. While new borrowings have dropped, the total accumulated interest remains a heavy financial weight. Therefore, the country continues to allocate billions of ringgit just to service older obligations.
The Prime Minister, who also serves as the Finance Minister, noted that current tax revenues are actively covering past structural missteps. Specifically, the state is still covering massive liabilities left behind by the 1Malaysia Development Bhd (1MDB) financial scandal.
“People say the debt is increasing. No, it is now decreasing,” Anwar explained to the university community. “But the total amount of debt has increased because interest rates are high. What are we paying interest for? We are paying for old debts.”
State Bailouts Affecting The Malaysia National Debt
Furthermore, the national budget must absorb financial recovery costs from several domestic institutions. Anwar mentioned that organizations like the Federal Land Development Authority (Felda) and Lembaga Tabung Haji required state interventions due to poor historical corporate decisions.
On the topic of Felda, Anwar praised early pioneers for building a highly disciplined corporate structure. However, later strategic decisions, including the public listing and management shifts of Felda Global Ventures (FGV), generated major financial shortfalls. As a result, the federal government has been forced to inject public funds to protect the livelihood of agricultural settlers.
Fiscal Targets To Control Malaysia National Debt Long-Term
Meanwhile, opposition critics continue to question current subsidy rationalization programs and domestic fuel price adjustments. Anwar defended these policy shifts, stating that maintaining un-targeted fuel subsidies costs the country roughly RM40 billion annually. He noted that keeping fuel artificially cheap would only cause the country’s liabilities to expand further.
Ultimately, the Ministry of Finance plans to lower the national fiscal deficit to 3.8% of Gross Domestic Product (GDP). The long-term plan aims to cap the entire Malaysia national debt at a maximum of 60% of GDP over the next five years. These concrete structural spending changes are expected to preserve the country’s sovereign credit ratings amid shifting global market conditions.
