Najib: Malaysia's external debt tripled to RM740bil due to 'new loan definitions'

KUALA LUMPUR: Malaysia's external debt has swelled to RM740.7bil in the third quarter of last year from RM196bil in the final quarter of 2013, the Dewan Rakyat was told.

Prime Minister Datuk Seri Najib Tun Razak, who is also the Finance Minister, in a written reply said that the sharp increase was due to a new definition in debt reporting, in use since last year.

"The new definition was in line with international debt reporting. This includes external offshore loans, public enterprises and the private sector," he said to reply to a question by William Leong Jee Keen (PKR-Sepang).

Leong had asked the Finance Ministry to reveal the reason why the country's external debt stood at RM740.7bil and its impact on the country's economy.

Najib said the external debt, based on the new definition, showed the level of Ringgit denominator security debt held by foreigners, comprising two-thirds of the increase of external debt.

"This is because of the depth, openness and attractiveness on Malaysia's financial market," he said.

The Finance Ministry also reveal that the Government's debt as at Dec last year stood at RM582.8bil or 54.5% of the country's Gross Domestic Product (GDP).

"From the total, 97.1% or RM566.1bil was domestic debt, while the remaining RM16.8bil or 2.9% was external debt.

"The Federal Government's financial debt remains manageable and can be categorised as at a modest position," he said.

The Government, he said, remains committed to ensure that the debt level remains under the 55% limit of the country's GDP.