Malaysia’s debt service charge growth slows to 6.4% in 2025, down from 12.3% in 2023, as fiscal reforms and lower new borrowings take effect
KUALA LUMPUR: The government has slowed the growth of debt service charges (DSC) to 6.4% in 2025. This compares to a 12.3% growth rate in 2023 and 9% in 2024.
Deputy Finance Minister Liew Chin Tong attributed the improvement to fiscal reforms and prudent debt management. He provided the figures in parliament today.
New government borrowings have been reduced from RM100 billion in 2021 and 2022 to RM92 billion in 2023. Borrowings fell further to RM77 billion in 2024 and are projected at RM75 billion for 2025.
Liew was responding to a question on the strategy to manage DSC, which is expected to account for 16.3% of total government revenue this year. He outlined several ongoing fiscal strategies.
These include pursuing gradual fiscal consolidation and expanding the revenue base. Measures involve expanding the Sales and Services Tax (SST) and implementing e-invoicing.
Other steps are optimising public expenditure through targeted subsidies and rationalising statutory bodies. “Government borrowing is used solely to finance projects and programmes under development expenditure that provide long-term returns,” Liew said.
The government has also set a limit on exposure to financial guarantees at 25% of gross domestic product. It prioritises user-payment projects through the Public-Private Partnership Master Plan 2030.
“Responsible fiscal management, supported by pragmatic economic management, will be able to drive the development of economic activities,” Liew highlighted. He said this approach encourages sustainable economic growth.
