PM Denies 1MDB Debt Fully Settled, Says New Borrowing Based on Repayment Capacity

PUTRAJAYA: The government has stressed that all new national borrowings are undertaken responsibly, based on the country’s needs and its ability to repay.

Prime Minister Datuk Seri Anwar Ibrahim said a responsible government would avoid excessive debt burdens that could ultimately weigh on future generations.

He said the country’s debt ratio was also expected to decline from 64 per cent in 2026 to 63.7 per cent in 2027, reflecting the government’s commitment to ensuring long-term fiscal sustainability.

“This has become controversial because some have pointed out that the overall debt has increased. That is true, because existing debts still need to be repaid.

“A responsible government only borrows according to what is necessary to manage the economy.

“At the same time, however, it must always plan for the future. We should not burden future generations with the excessive spending of the present generation,” he said.

He was speaking at the Ministry of Finance’s Monthly Assembly, attended by ministry personnel and representatives from other ministries, here on Monday.

Meanwhile, Anwar denied claims that all debts associated with 1Malaysia Development Berhad (1MDB) had been fully settled, stressing that outstanding obligations related to the issue still needed to be taken into account.

“Some have claimed that all 1MDB debts have been paid off.

“I do not know which book they got that from, but it is not true. We still have debts and the associated interest to repay,” he said.

Elaborating further, Anwar, who is also Finance Minister, said responsible fiscal management was crucial amid challenging global economic conditions.

This included a situation in which global crude oil prices had risen from the projected US$70 per barrel to between US$110 and US$120 per barrel, he added.

Anwar said the government also had to bear substantial expenditure to ease the burden on the people, including fuel subsidies involving an additional RM40 billion annually, as well as increased cash assistance and civil servants’ salaries.

He said the government’s challenge was to ensure that these commitments could be fulfilled without undermining the country’s fiscal position.

This required spending discipline, efforts to curb financial leakages and improvements in governance.

AWANI