Gov't should maintain debt level, says EPF department head

While the Pakatan Harapan-led federal government is trying to reduce its national debts and liabilities, the Employees Provident Fund (EPF) head of economic and capital markets department Nurhisham Hussein said the national debt should be maintained at its current level.

He argued the government only needs to keep the debt level stable at its current level of RM686.8 billion (or RM1.09 trillion with other liabilities) in order to pare down the debt-to-GDP ratio and keep the national debt sustainable.

“Even if you have a deficit of three percent per year, the economy is growing at seven to eight percent. That means the level of income is growing faster than the level of debt. It is sustainable, as long as you continue to do that, the figure will just come down.

“It is not that big. It is not rocket science. It is just plain arithmetic.

“The thing is, successful debt restructuring has never been about repaying the debt. Never. It’s always been about growth or inflation,” he told reporters today at the sidelines of the launch of the World Bank’s June 2018 edition of its Malaysia Economic Monitor.

The World Bank report maintained its previous forecast that Malaysia’s GDP will grow by 5.4 percent this year while the Harapan-led government had previously pledged to maintain the previous administration’s 2.8 percent target for its budget deficit.

[More to follow] - Mkini