Government debt for the year 2023 has decreased compared to 2021 and 2022, says Anwar

KUALA LUMPUR: New federal government debt for the years 2023 and this year has seen a decline compared to the periods of 2021 and 2022, said Datuk Seri Anwar Ibrahim.

Reported by Berita Harian, the Prime Minister said that this decrease demonstrates his administration’s commitment to fulfilling promises to reduce the country’s accumulated debt, which has now reached RM1.5 trillion.

He, who is also the Finance Minister, however, emphasized that the government cannot arbitrarily cancel all debts, including inherited ones, as such a move would affect projects that benefit the people, such as building new schools or universities.

“For instance, in 2021 and 2022, we borrowed RM100 billion from both external and internal sources. In 2022, the debt was RM100 billion. Since taking over in 2023, we have communicated that we cannot sustain this situation with mounting and increasing debts.

“So last year, we reduced the debt to RM93 billion from the previous RM100 billion, or the year before. This year, the debt is RM86 billion. A reduction from RM100 billion to RM93 billion means, now it’s RM86 billion.

“But why can’t we just cancel all debts? It would impact projects that help the people. New schools or universities and development, including our obligation to pay off old debts,” he said in a video shared on his Facebook page today.

Anwar explained that the statutory debt burden or statutory debt limit of the country is currently high at 64 percent of Gross Domestic Product (GDP).

“This amount exceeds what we feel is necessary to anchor foreign or domestic investor confidence. So our target is to gradually reduce it to at least 60 percent.

“This is related to the deficit. Previously, the budget deficit meant income was less than expenditure, spending more. So it reached up to six percent. Then when we took over, it was 5.6 percent in 2022. While in 2023, it decreased to five percent,” he said.

Therefore, he said, the government is striving to gradually reduce the deficit from 5.6 percent to 5.0 percent in 2023, and further to 4.3 percent as projected for this year.

Hence, he said, it is incorrect to say that the financial, fiscal, and budget policies appear restrictive and do not fulfill what was promised.

“But what is being spread is partly not based on facts. Part of it is just irresponsible political rhetoric because I provide these figures and they are maintained from a standpoint of truth.

“The Ministry of Finance periodically releases these data together with the National Statistics Department. I see on social media we are attacked, but the facts are not true,” he said.