Najib: Harapan's opposition-style debt talk caused markets to sink

Former prime minister Najib Abdul Razak has criticised the new Pakatan Harapan government for claiming the country's debt was significantly higher than official figures, claiming that it had spooked the financial markets.

He also slammed ministers for taking their own statements lightly.

"Words said and allegations made while in the opposition carries a very different weight now that you are in power and holding the positions of the finance minister or the prime minister.

"Coming out to say that our country's government debt to GDP is now 65 percent, which is a big jump from the official 50.9 percent figure, and saying that our debt is now RM1 trillion, without giving any details of what you mean, will just unsettle the financial markets, alarm the credit rating agencies and investors’ confidence in our institutions such as our Bank Negara Malaysia," he said in a statement last night.

Mahathir had on Monday claimed the country's actual debt level left behind by the previous BN government amounted to RM1 trillion. This was later confirmed by Finance Minister Lim Guan Eng.

As a result, Najib said the alarming and confusing statements had caused the Kuala Lumpur Stock Exchange to sink by 40.78 points or 2.21 percent. He said this was in contrast to the Indonesian Stock Exchange which gained 0.71 percent.

"The business news portal The Edge Markets said this sharp fall in our share market was contributed by concern on our public debt.

"Surely this fall would affect our funds such as Employees Provident Fund and Perbadanan Nasional Berhad and could lower the dividend rates for its members for the year.

"Similarly, issuing statements that we should not worry about our country's sovereign credit ratings being downgraded will result in further rocking the confidence in our institutions," he said.

Najib warned that a ratings downgrade would result in a higher national debt financing cost of RM10 billion per annum.

He added that it could also cause local banks which had borrowed from the international markets to sustain losses.

"It may also result in large capital outflows from foreign investors and cause our ringgit to weaken," he said.

Najib said Harapan should not try to blame him at the expense of the people's wellbeing.

"While you may want to slander and put all the blame on me, to give a perception of a dire financial position to justify why you cannot deliver on your manifesto promises and to massively cut the civil service, you must remember that the country and our people come first.

"You can also issue misleading statements on 1MDB or tell half the story about it to blame me, but the time to play politics is over,” he said.

"Words spoken while in such positions of power result in actual losses to the country and the people, as was proven today in the stock market.

“It is no longer just about votes anymore.” -Mkini