Nation borrowing less but spending is up, Anwar tells Parliament

 

KUALA LUMPUR: Malaysia is borrowing less but spending has increased, says Datuk Seri Anwar Ibrahim.

The Prime Minister said the government had allocated RM16bil for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara), RM18bil for civil service salary increases and more than RM40bil for fuel subsidies.

He said new government borrowing had declined from RM100bil in 2021 and 2022 to RM92.6bil in 2023, RM76.8bil in 2024 and RM75.6bil last year.

"Although our debt is decreasing, we are borrowing less, while spending is still increasing," he said during Prime Minister’s Question Time in the Dewan Rakyat on Thursday (Nov 12).

Howard Lee (PH-Ipoh Timor) wanted to know why national debt had yet to be reduced to a more sustainable level and whether the country's fiscal position provided enough room to respond to a further escalation of the Middle East conflict.

He said the fiscal deficit had declined consistently, from 6.4% in 2021 to a projected 3.3% next year.

The Federal Government's debt-to-GDP ratio was also expected to fall from 65.2% to 64% this year and 63% next year, he added.

Anwar said comparisons with borrowing figures in 2018 were misleading because off-budget agencies were not included in the calculations at the time, whereas the current method accounted for them.

He acknowledged that national debt had risen sharply between 2020 and 2022 due to the Covid-19 pandemic, but said new borrowing under his administration was significantly lower and used for national development.

He also said the ratio of Federal Government debt and liabilities to GDP had eased from 80.9% at the end of 2022 to 80.7% at the end of June this year.

Anwar said increased spending had been managed alongside efforts to prevent leakages, while tax reductions were also provided for micro, small and medium enterprises.

He added that the government was working with government-linked investment companies (GLICs) to channel funding towards projects that would benefit the country and bumiputra businesses. - Star