KUALA LUMPUR: The government’s combined debt and liabilities stood at RM1.69 trillion, equivalent to 84.1 per cent of gross domestic product (GDP) as at end-June 2025, compared with RM1.63 trillion or 84.5 per cent of GDP as at end-December 2024, according to the Ministry of Finance. (MoF).
In its Fiscal Outlook and Federal Government Revenue Estimates 2026 report, released today, the MoF stated that the overall debt and liabilities comprise federal government debt, committed guarantees, and financial obligations from public-private partnerships, as well as private finance initiatives.
The ministry stated that outstanding Financial Guarantees totalled RM424.7 billion, or 21.1 per cent of GDP, as of the end of June 2025, maintaining a level below the 25 per cent limit stipulated in the First Schedule of Act 850.
Meanwhile, guarantees under Loans Guarantee (Bodies Corporate) grew marginally by 1.0 per cent to RM336.1 billion, or 16.7 per cent of GDP, due to prudent and selective deployment of the guarantees, with disbursement only for existing projects and programmes.
The MoF said based on segmental distribution, infrastructure remained the largest recipient, accounting for 59.6 per cent of total outstanding guarantees, primarily for major public transportation projects such as the East Coast Rail Link, Mass Rapid Transit, highways and home financing.
Outstanding exposure from guarantees and support under the Financial Procedure Act 1957 (Act 61) amounted to RM31.1 billion or 1.5 per cent of GDP, with Urusharta Jamaah Sdn Bhd representing the largest share at 78.1 per cent.
The ministry said guarantees under Act 61 provided for undertakings and support are intended for specific purposes such as strategic investments and corporate restructuring exercises.
"Moving forward, the government will be more stringent in the provision of these instruments for strategic needs to contain fiscal risks,” added the ministry.
As at end-June, the outstanding schemes from public guarantee schemes are registered at RM57.5 billion.
The MoF said the risks stemming from the outstanding guarantee schemes remain minimal as the management of these schemes requires strict adherence to banking standards under the surveillance of Bank Negara Malaysia.
"Overall, federal government debt and liabilities remain manageable within contained risk exposure, due to full redemption of several liabilities obligations as well as no new committed guarantees," said the MoF.
Moving forward, the ministry said the government will continue to integrate fiscal elements into the broader public financial management framework, thereby fostering a conducive business environment, enhancing investor confidence, and realising the nation’s growth potential. - Bernama
