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Finance Minister: Govt committed to reducing overall debt and liabilities

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Lim Guan Eng

PUTRAJAYA: The government is committed to continue reducing the country’s overall debt and liabilities rather than just the direct debt component.

In a statement yesterday, Finance Minister Lim Guan Eng said the government’s newly established Debt Management Office was pressing on with its fiscal consolidation exercise to slow down the growth of direct government debt without affecting economic growth.

“The exercise, along with cleaner and good corporate governance, will help reduce the overall debt and liabilities of the government further in 2019 and beyond,” he said.

On the government’s achievements, he gave the example of its ability to control and reduce the overall debt and liabilities to 75.4 per cent of the gross domestic product (GDP) last year from 79.3 per cent in 2017 although there was a 1.1-percentage point rise in direct government debt to 51.2 per cent of GDP.

Lim Guan Eng

The 3.9-percentage point drop in total debt and liabilities was due to successful cost rationalisation of both overpriced mega-projects and Public Private Partnership (PPP) payments, he explained.

Lim said financial commitments made by the previous government other than direct government debt and committed government guarantees, namely lease payments to PPP and other liabilities such as 1Malaysia Development Bhd, fell by 6.8 percentage points to 15 per cent of GDP in 2018 from 21.8 per cent in the preceding year.

“It is this component (of the government’s debt and liabilities) that enabled the government to successfully reduce its overall debt and liabilities within one year,” he explained.

The Finance Ministry on Saturday said in a statement that the newly set-up Debt Management Committee chaired by Lim convened its first meeting on Friday to discuss the government’s overall debt and liabilities of RM1.1 trillion as at end-2018. – Bernama

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