PUTRAJAYA: The government is committed to continue reducing the country’s overall debt and liabilities rather than just the direct debt component.

In a statement today, Finance Minister Lim Guan Eng said the government’s newly established Debt Management Office was pressing on with its fiscal consolidation exercise to slow down the growth of direct government debt without affecting economic growth.

“The exercise, along with cleaner and good corporate governance, will help reduce the overall debt and liabilities of the government further in 2019 and beyond,” he said.

On the government’s achievements, he gave the example of its ability to control and reduce the overall debt and liabilities to 75.4% of the GDP last year from 79.3% in 2017 although there was a 1.1% point rise in direct government debt to 51.2% of GDP.

The 3.0% point drop in total debt and liabilities was due to successful cost rationalisation of both overpriced mega-projects and Public Private Partnership (PPP) payments, he explained.

Lim said financial commitments made by the previous government other than direct government debt and committed government guarantees, namely lease payments to PPP and other liabilities such as 1Malaysia Development Bhd, fell by 6.8% points to 15% of GDP in 2018 from 21.8% in the preceding year.

“It is this component (of the government’s debt and liabilities) that enabled the government to successfully reduce its overall debt and liabilities within one year,” he explained.

The Finance Ministry yesterday said in a statement that the newly set-up Debt Management Committee chaired by Lim convened its first meeting on Friday to discuss the government’s overall debt and liabilities of RM1.1 trillion as at end-2018. — Bernama