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Govt succeeds in achieving fiscal deficit target of 5pc in 2023, says MOF

Publish date: Thu, 29 Feb 2024, 10:39 PM

KUALA LUMPUR, Feb 29 — The government succeeded in achieving a fiscal deficit target of five per cent of gross domestic product (GDP) or RM91.4 billion in 2023, which is lower than the 5.6 per cent or RM99.5 billion recorded in 2022, according to the Ministry of Finance (MoF).

According to the reply posted on the Parliament’s website today, the level of the fiscal deficit is projected to continue to decrease to 4.3 per cent in 2024 as announced in Budget 2024 involving new loans amounting to RM85.4 billion.

“In this regard, the government will continue gradual fiscal consolidation in stages to ensure medium and long-term financial sustainability,” said the MoF in response to a question from Datuk Seri Ronald Kiandee (PN-Beluran) who wanted to know details about the latest position of the government debt, new loans as well as the rate of fiscal deficit to date.

Meanwhile, the total government debt as at the end of December 2023 was RM1.17 trillion or 64.3 per cent of GDP.

Debt grew by 8.6 per cent in 2023, lower than the growth of 10.2 per cent in 2022.

The composition of government debt consists of domestic debt amounting to RM1.14 trillion or 97.5 per cent and offshore loans amounting to RM29.8 billion or 2.5 per cent of the total government debt.

“The government’s debt and liability exposure position at the end of December 2023 stood at RM1.53 trillion or 84 per cent of GDP.

“This amount covers government debt amounting to RM1.17 trillion, guarantee commitments amounting to RM226.1 billion and other liabilities amounting to RM133.7 billion,” according to the MoF.

In terms of statutory limits, debt instruments consisting of Malaysian Government Securities (MGS), Malaysian Government Investment Issues (MGII) and Malaysian Islamic Treasury Bills (MITB) registered 62.1 per cent of GDP, still below the statutory limit of 65 per cent.

Meanwhile, offshore loans stood at RM29.9 billion and Malaysian Treasury Bills (MTB) amounted to RM5.5 billion, both of which are below the set statutory limits of RM35 billion and RM10 billion respectively.

“The government remains committed to reducing the level of debt as per the target set under the Public Finance and Fiscal Responsibility Act 2023 (Act 850) which is the overall level of debt below 60 per cent of GDP which needs to be achieved in the medium term,” according to the MoF. — Bernama

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