Govt debt 'manageable'

KUALA LUMPUR: Federal Government debts remained at a moderate and manageable level and has not exceeded the self-imposed target of 55% of the country's GDP.
Prime Minister Datuk Seri Najib Abdul Razak said as of June 2016, the federal government's debt was RM655.7 billion, which is 53.2% of the GDP.
He said from the total, RM628.8 billion (95.9%) was domestic debt while RM26.9 billion (4.1%) was offshore borrowings.
Najib was responding to Datuk Noor Ehsanuddin Mohd Harun Narrashid (BN-Kota Tinggi) during ministerial question time at the Dewan Rakyat today.
Noor Ehsanuddin asked the government to state the federal government's latest debt position and government guarantees based on the recently tabled 2017 Budget.
Najib said the borrowings are aimed at meeting deficits that arose as a result of lack of revenue to finance government development expenditure.
"This development expenditure met by the loans is productive expenditure that can buttress economic growth and bring benefit to the people, through construction of schools, hospitals, roads and dams," he said.
He said the development expenditure also indirectly benefited the private sector to implement various programmes and economic activities.
Najib also said the amount of guarantee provided by the government up to June 2016 stood at RM180.9 billion or 14.7% of the GDP.
"The guarantee is given to public entities that implement infrastructure projects such as Prasarana and National Higher Education Fund Corporation, which are involved in infrastructure construction such as the LRT, MRT and the provision of student loans for higher education," he said.
He reiterated that the government remained committed to ensuring debt levels did not exceed 55% of the GDP.
Responding to a supplementary question on government measures to avoid debt from continuing to rise in the future, Najib said the government would ensure the expenditure did not exceed revenue and have surplus in terms of the current account.
"We must ensure the loans are used to develop the economy, enhance national economic activities. We also give priority to domestic borrowing and with such measures, including prudent, efficient and effective spending that focuses on its outcome, God willing we can manage the national debt to be under control," he said.