The need to raise debt level


“Debt to GDP ratio of anything under 75% to 80% is considered manageable, so there is nothing to be concerned about since it (Malaysia’s debt to GDP) is in line with market players’ expectations,” said Juwai IQI chief economist Shan Saeed

KUALA LUMPUR: Rising concern over numerous Covid-19 variants has intensified the need for government-intervention to support the economy as well as protect households and vulnerable groups by adapting expansionary fiscal policy and increasing debt limit in the short term.

Malaysia had increased the statutory debt limit to 60% from 55% of gross domestic product (GDP) last year, and plans are underway to increase it to 65% to provide the government with the necessary room for funding needs

The United States, China, the United Kingdom and South Africa also took the same path.

“Debt to GDP ratio of anything under 75% to 80% is considered manageable, so there is nothing to be concerned about since it (Malaysia’s debt to GDP) is in line with market players’ expectations,” said Juwai IQI chief economist Shan Saeed to Bernama. — Bernama

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