Malaysia’s national debt increased by RM66 billion to RM1.24 trillion as of September last year. But is it really a cause for concern?
*The footage in this video is sourced from various social media platforms for educational and non-commercial purposes only, with all rights remaining with their respective owners.
Free Malaysia Today is an independent, bi-lingual news portal with a focus on Malaysian current affairs.
Subscribe to our channel - http://bit.ly/2Qo08ry ------------------------------------------------------------------------------------------------------------------------------------------------------ Check us out at https://www.freemalaysiatoday.com Follow FMT on Facebook: https://bit.ly/49JJoo5 Follow FMT on Dailymotion: https://bit.ly/2WGITHM Follow FMT on X: https://bit.ly/48zARSW Follow FMT on Instagram: https://bit.ly/48Cq76h Follow FMT on TikTok : https://bit.ly/3uKuQFp Follow FMT Berita on TikTok: https://bit.ly/48vpnQG Follow FMT Telegram - https://bit.ly/42VyzMX Follow FMT LinkedIn - https://bit.ly/42YytEb Follow FMT Lifestyle on Instagram: https://bit.ly/42WrsUj Follow FMT on WhatsApp: https://bit.ly/49GMbxW ------------------------------------------------------------------------------------------------------------------------------------------------------ Download FMT News App: Google Play – http://bit.ly/2YSuV46 App Store – https://apple.co/2HNH7gZ Huawei AppGallery - https://bit.ly/2D2OpNP
00:04Last year, federal debt rose by RM66 billion, reaching RM1.24 trillion in nine months.
00:11In comparison, the government borrowed RM1.17 trillion for the entire 12 months in 2023.
00:18But higher debt does not always mean that the country is in deep financial trouble.
00:22There may be a good reason for it.
00:30Economist Go Lim Thay says the present government is not to blame for it.
00:36He says there are two big reasons for it.
00:39One, high spending during the COVID-19 crisis.
00:42And two, financial mismanagement dating back to the 1MBB scandal.
00:47Go says the debt isn't a threat to Malaysia's future, although it must be properly managed.
00:52He says Malaysia's finances remain strong with a broad-based economy and access to funding.
00:58On top of that, all three major credit agencies gave Malaysia a high rating last year,
01:04proved that the country's finances are being managed well.
01:08Still, the government admits it can do better and is looking to introduce better fiscal policies.
01:16For example, it has made debt figures more transparent so the public and policy makers can better assess them.
01:22Since 2018, the government has broadened its disclosures, revealing previously hidden items to give the public a better view of the country's financial health.
01:33Meanwhile, Malaysia has a two-step plan to strengthen its financial position.
01:39Step one, grow the economy.
01:41Step two, improve living standards or keeping finances stable.
01:45The government also expects to save billions of ringgit by rationalizing subsidies, including for diesel, which is already in place,
01:53and Ron 95 petrol expected to kick in later this year.
01:57Starting July 1st, the expansion of the sales and service tax to certain non-essential items,
02:03such as imported fruit, private school fees, and private healthcare services, will also bring in additional revenue.
02:09In fact, these reforms are already beginning to pay off.
02:15Imran Yousouf from MIDF Amanah says they are bound to ease the country's debt burden.
02:20The numbers speak for themselves.
02:23Since the unity government took over in December 2022,
02:26Malaysia's fiscal deficit has shrunk, going from 5% of the GDP in 2023 to 4.1% last year.
02:33It is projected to drop even further to 3.8% in 2025.
02:40Borrowings have also gone down from RM100 billion in 2022 to RM93 billion in 2023 and RM75 billion last year.
02:51Meanwhile, the economy grew from 3.6% in 2023 to 5.1% in 2024, with inflation dropping to 1.8%.
03:00The bottom line, there's less to worry about than you think.
03:05The foundations are strong and the course is steady.
03:07Malaysia's finances are on firm footing and projected to get even better.
