He told the media recently that Malaysia’s debt has reached the ceiling and should gradually go down.
The country had raised the debt limit to 60% of gross domestic product (GDP) from 55% in 2020 in the early days of the COVID-19 pandemic, and lifted it further to 65% in 2021 to make room for additional borrowings to fund fiscal stimulus.
The law under which the ceiling was raised lapsed on December 31, 2022. Malaysia’s actual debt is at 61% of GDP.
While Malaysia remains A-rated by credit agencies Moody’s Investors Service and S&P Global Ratings, a reduction in government debt ratio will be key to winning a higher credit score from Fitch Ratings Ltd., which is currently the only one of the three main rating companies to have a lower BBB+ rating on the country.
Addressing a dialogue session on budget on January 17, the PM said Malaysia’s national debt including liabilities has reached 1.5 trillion RM (about 346 billion USD), equivalent to 80% of GDP.