KUALA LUMPUR: The Madani government has successfully reduced new debt despite ongoing political debates about the national debt position according to Prime Minister Datuk Seri Anwar Ibrahim.
Anwar, who also serves as Finance Minister, emphasised that reducing new debt remains crucial because fiscal deficits inevitably lead to increasing total debt amounts.
“The fiscal deficit indeed poses a challenge,” he said during his tabling of the 13th Malaysia Plan in the Dewan Negara today.
“The first MADANI government is trying to reduce the fiscal deficit and new debt even though it remains a never-ending political polemic.”
He explained the fundamental reason behind deficit reduction by stating “Why do we need to reduce the deficit? If we don’t, the debt will balloon.”
The government has achieved significant progress in deficit reduction from 5.6% of gross domestic product to five percent in 2023.
Further reductions followed with the deficit reaching four percent before the current projection of 3.8% for 2025.
Anwar confirmed that the overall debt increase results from interest burdens on legacy debts rather than new borrowing activities.
“The records clearly show that new debt has decreased,” he stated regarding the government’s borrowing patterns.
The government maintains its commitment to gradual fiscal deficit reduction with a target of reaching three percent of gross domestic product within the next five years.
This commitment includes bringing the national debt level down to no more than 60% of GDP through disciplined financial management. – Bernama
