KUALA LUMPUR: The growth rate for government debt is declining and is expected to go down to 6% this year from 6.4% last year, says Datuk Seri Anwar Ibrahim.
The Finance Minister said that the decline reflected the unity government’s commitment to maintaining the debt-to-gross domestic product (GDP) ratio below 60%.
He added that the rate was 8.6% in 2023 and 10.2% in 2022.
By the end of December 2024, debt levels had reached RM1.247 trillion, he said. Of this total, RM198bil was from the government’s gross borrowing, a decrease from RM226.6bil the previous year.
“The debt growth rate for 2025 is projected to further reduce to around 6%, reflecting a commitment to maintaining the debt-to-GDP ratio below 60%,” he told the Dewan Rakyat yesterday.
“This trend demonstrates our dedication to ensuring fiscal stability in the medium term,” said Anwar in a written Parliamentary reply to Jempol MP Datuk Shamsulkahar Mohd Jeli.
Anwar said borrowing is necessary each year to finance the fiscal deficit and repay maturing debt, given the government’s ongoing financial shortfall. “These borrowings are permitted based on provisions outlined in the relevant debt management acts,” he said.
The government is implementing several strategies including fiscal consolidation to keep debt levels manageable.
“The fiscal deficit showed a declining trend, at 4.1% of GDP in 2024 compared to 5% in 2023 and 5.5% in 2022. In 2025, we are expanding the scope of sales and service taxes and implementing e-invoicing in phases to boost revenue,” he said.
“Public expenditure optimisation remains a focus, with targeted subsidy efforts set to expand to RON95 by mid-2025 to curb waste and leakage while protecting vulnerable groups.”
Anwar also said a special committee has been established to rationalise statutory bodies and ensure efficient spending. He emphasised that government borrowings are needed to finance development expenditure on high-impact projects. “Our aim is to ensure that development expenditure remains no less than 3% of GDP,” he stated.
