By Shikin Louis
KUCHING, Oct 18: The Madani government has introduced a robust fiscal strategy to tackle Malaysia’s mounting national debt, which is expected to reach RM1.5 trillion or 80 per cent of the Gross Domestic Product (GDP).
Prime Minister Dato’ Seri Anwar Ibrahim, in tabling the National Budget 2025 broadcast live on TVS today, revealed that the national debt currently stands at RM1.2 trillion, accounting for 64 per cent of GDP.
When liabilities are included, this figure surges to RM1.5 trillion, or 80 per cent of GDP.
Alarmingly, for every RM1 of tax revenue collected, 16 sen is allocated solely to pay interest on the debt, excluding the principal amount.
“To address this, the government has outlined a phased approach to steadily reduce the fiscal deficit.
“The deficit is projected to decline from 5.5 per cent in 2022 to 5 per cent in 2023, with further reductions to 4.3 per cent in 2024 and 3.8 per cent in 2025.
“This will also see new debt issuance fall from RM100 billion in 2022 to RM90 billion in 2023, with estimates of RM85 billion for 2024 and RM80 billion for 2025,” he said.
He further said the ultimate goal is to achieve a fiscal deficit of 3 per cent and bring the national debt below 60 per cent of GDP within the medium term, a key target under the Public Finance and Fiscal Responsibility Act (FRA).
Additionally, Anwar said the government has revised its revenue collection forecast for 2024, projecting an increase to RM322 billion, up from the previous estimate of RM308 billion.
“By 2025, revenue is expected to rise further to RM340 billion.
“Despite this, Malaysia’s tax-to-GDP ratio remains low at 12.6 per cent compared to neighbouring countries like Thailand (16.1 per cent), the Philippines (14.1 per cent), and Singapore (13.7 per cent),” he stressed.
Anwar also mentioned that Malaysia’s total trade for the January to August 2024 period recorded a strong growth of 10.2 per cent, reaching RM2.14 trillion.
This marks a significant milestone as the country continues to achieve a trade surplus for 53 consecutive months since May 2020, highlighting the resilience and strength of Malaysia’s export sector amidst global economic challenges. — DayakDaily
