Govt has reduced new debt, fiscal deficit declining, Anwar says

The country’s new debt has gradually reduced despite continuing polemics on the national debt position, said Prime Minister Anwar Ibrahim.

Anwar, who is also the finance minister, said that this reduction is important because, as long as a fiscal deficit exists, the total amount of debt will continue to rise.

“The fiscal deficit indeed poses a challenge. The first Madani government is trying to reduce the fiscal deficit and new debt, even though it remains a never-ending political polemic.

“Why do we need to reduce the deficit? If we don’t, the debt will balloon.

“We brought it down from 5.6 percent (of gross domestic product) to five per cent (in 2023), followed by four percent, and now we are projecting 3.8 percent (for 2025) and a continued reduction for the following year,” he said when tabling the 13th Malaysia Plan (13MP) in the Dewan Negara today.

Anwar said the increase in overall debt was due to the interest burden from legacy debts, not from new borrowings, and the records clearly show that new debt has decreased.

He also said the government remains committed to reducing the fiscal deficit gradually with the target of reaching three percent of GDP in the next five years, and bringing down the debt level to no more than 60 percent of GDP.

- Bernama

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