We only borrow to fund fiscal deficit, maturing debt, says Amir

 

Finance minister II Amir Hamzah Azizan said the amount of federal government loans last year decreased to RM226.595 billion compared with RM230.949 billion in 2022. (Bernama pic)

KUALA LUMPUR: 

The finance ministry only borrows to finance the government’s fiscal deficit and maturing debt to ensure that it does not borrow excessively, says finance minister II Amir Hamzah Azizan.

Through strict and phased fiscal consolidation, Amir told the Dewan Rakyat that the government has managed to avoid an increase in the amount of net loans while reducing debt growth.

During the winding up of the auditor-general’s (A-G) report on the federal government’s financial statements in 2023, the minister said the amount of federal government loans last year decreased to RM226.595 billion from RM230.949 billion in 2022.

“The fiscal deficit has been consistently reduced. The amount of net loans has decreased from RM99.4 billion in 2022 to RM92.5 billion in 2023.

This trend is expected to continue to decrease to around RM86 billion in 2024,

 he said.

Amir’s speech was read by youth and sports minister Hannah Yeoh as he was suffering from laryngitis.

He also explained the government’s financial commitment, which stands at RM285.634 billion, and guarantee commitment which expanded by RM3.288 billion to RM227.404 billion compared with 2022.

He said these guarantee commitments were debt commitments of government-linked companies (GLCs) and statutory bodies specifically tasked with implementing social obligations, especially public transport infrastructure projects.

“The increased guarantee commitment is to cover four ongoing transport infrastructure projects, namely the Mass Rapid Transit (MRT), Light Rail Transit 3 (LRT3), Sarawak Pan Borneo Expressway and the East Coast Rail Link (ECRL), in addition to covering infrastructure operating costs to improve the national transport network system.

This increased commitment is to implement infrastructure projects that cannot be accommodated through development spending, as well as other social projects such as the construction of schools, hospitals and federal roads,

 he added.

He reiterated that the government was determined to gradually reduce its ratio of debt-to-gross domestic product to below 60% in the medium-term, as stipulated in the Public Finance and Fiscal Responsibility Act. - FMT