KUALA LUMPUR— Malaysia's federal government managed to curb its debt growth in 2023, with the increase in debt slowing to 8.6 percent from 10.2 percent in 2022.
Prime Minister Datuk Seri Anwar Ibrahim announced that the total Federal Government debt for 2023 stood at RM1,172.5 billion, accounting for 64.3 percent of the gross domestic product (GDP), compared to RM1,079.6 billion or 60.3 percent of GDP in 2022.
Anwar attributed this decrease in debt growth to successful fiscal consolidation measures that reduced the fiscal deficit to RM91.4 billion in 2023, down from RM99.5 billion in 2022.
The Federal Government's debt composition in 2023 consisted of domestic debt amounting to RM1,142.7 billion or 97.5 percent and offshore loans amounting to RM29.8 billion or 2.5 percent of the total debt.
In response to a question from Tan Sri Muhyiddin Yassin regarding government loans and debt status, Anwar stated that loans issued by the federal government in 2023 totaled RM226.6 billion, a two percent decrease from 2022's RM230.9 billion.
This reduction in loans was primarily due to a decrease in new issuances to RM92.6 billion and RM134 billion for refinancing matured debts in 2023.
Anwar emphasised that all debt issuances in 2023 and 2022 were obtained domestically through the issuance of Malaysian Government Securities (MGS) instruments, Malaysian Government Investment Issues (MGII), and treasury bills.
The Federal Government's debt and liabilities exposure position amounted to RM1,532.3 billion or 84 percent of GDP at the end of December 2023, taking into account guaranteed commitments and other liabilities.
Despite the debt reduction, Anwar affirmed the government's commitment to further lowering debt levels as targeted under the Public Finance and Fiscal Responsibility Act 2023 (Act 850), aiming for an overall debt level below 60 percent of GDP in the medium term.
He expressed confidence that the government could gradually reduce the fiscal deficit and debt levels without compromising national development and welfare, enhancing its credibility as a responsible entity.