Household debt at RM1.53tri as of last year

 

Housing loans made up the largest portion of the country’s total household debt, followed by vehicle loans and personal financing.

PETALING JAYA: Malaysia’s aggregate household debt stood at RM1.53 trillion at the end of 2023, said Prime Minister Anwar Ibrahim.

Anwar, who is also the finance minister, said housing loans made up the largest portion of the country’s aggregate household debt at 60.5%, followed by vehicle loans (13.2%) and personal financing (12.6%).

Aggregate household debt for previous years was RM1.45 trillion in 2022, RM1.38 trillion in 2021, RM1.32 trillion in 2020, RM1.25 trillion in 2019, and RM1.19 trillion in 2018.

“The household debt-to-GDP ratio at the end of 2023 also increased slightly to 84.2% compared to 2018 (82%),” he said in a written parliamentary reply.

He was responding to a question from Pang Hok Liong (PH-Labis) about the country’s aggregate household debt from 2018 to 2023.

Anwar said there was a 5.1% annual growth rate in household debt from 2018 to 2023.

He said this was mainly driven by housing loans and vehicle loans following various homeownership incentives offered by the government and the private sector, as well as sales and service tax (SST) incentives for the purchase of motor vehicles between 2020 and 2022.

Separately, deputy finance minister Lim Hui Ying said during the question-and-answer session that Bank Negara Malaysia (BNM) was taking a cautious approach to risks associated with household debt to ensure they will not have a negative effect on the country’s financial system.

Apart from ensuring that individuals borrow based on their ability to repay within the stipulated period, she said, BNM is working to improve the public’s financial literacy level and encouraging households which have substantial borrowings to follow the Credit Counselling and Debt Management Agency’s (AKPK) online financial education programme.

She was responding to a question from Afnan Hamimi Taib Azamudden (PN-Alor Setar) on the government’s efforts to reduce the country’s household debt ratio. - FMT