Guan Eng: National liabilities total RM1.087 trillion, 80.3% of GDP

PUTRAJAYA: Finance Minister Lim Guan Eng today provided the breakdown of Malaysia's national liabilities of RM1.087 trillion, equivalent to a whopping 80.3% of gross domestic product (GDP) as at end-December, 2017.
This included off-balance sheet payments of RM201.4 billion comprising lease payments (including rental, maintenance and other charges) for a host of Public-Private Partnership projects such as construction of schools, hostels, roads, police stations and hospitals.
Lim said the official federal government debt was at RM686.8 billion, while government guarantees amounted to RM199.1 billion involving entities that failed to service their debts.
Among them are Danainfra Nasional Bhd (RM42.2 billion), Govco Holdings Bhd (RM8.8 billion), Prasarana Malaysia Bhd (RM26.6 billion), Malaysia Rail-link Sdn Bhd (RM14.5 billion), and an estimated RM38 billion for 1Malaysia Development Bhd (1MDB).
"Hence, the federal government debt and liabilities amounted to a total of RM1.087 trillion or 80.3% of the GDP as at Dec 31, 2017," he explained.
However, excluding the off-balance sheet payments, the federal government debt would amount to RM885.9 billion.
"This represents the 65.4% of the GDP as highlighted by Prime Minister Tun Dr Mahathir Mohamad."
Former prime minister Datuk Seri Najib Abdul Razak had said Malaysia's government debt was manageable at a level below its self-imposed ceiling of 55% of GDP.
Lim said the move to disclose the RM1 trillion liabilities is to establish the true baseline on the state of financial affairs, diagnose the problems and then prescribe the necessary remedies.
He added that the economic fundamentals remain strong with a stable financial sector. "The banking sector is well capitalised and there is sufficient liquidity in the market."
Commenting on Najib's remarks that the RM1 trillion debt announcement jolted the financial markets, Lim opined that the stock market performance is subject to many factors, citing that the regional markets were also in the red. "Let's allow the market to adjust according to its own dynamics."