Deputy Finance Minister Liew Chin Tong.
KUALA LUMPUR: The government has succeeded in slowing the growth of debt service charges (DSC) in 2025 to 6.4%, compared with 12.3% in 2023 and 9% in 2024, as a result of the implementation of fiscal reform measures and prudent debt management.
Deputy Finance Minister Liew Chin Tong said the government had successfully reduced new borrowings to RM92bil in 2023.
This was further down to RM77bil in 2024, and projected at around RM75bil in 2025, from RM100bil in 2021 and 2022, with efforts to continue reducing it in 2026.
He said this in response to a question in Parliament yesterday regarding the government’s strategy to address debt service payments, which are expected to account for 16.3% of total government revenue in 2025.
Liew said the government is also continuously implementing several fiscal strategies.
This includes pursuing gradual fiscal consolidation.
“In addition, the government is expanding the revenue base and ensuring sustainable revenue collection, among others, through the expansion of the sales and service tax or SST and the implementation of e-invoicing.
“Other measures include optimising public expenditure, among others, through the implementation of targeted diesel and RON95 subsidies as well as the rationalisation of statutory bodies,” he added.
He said government borrowing is used solely to finance projects and programmes under development expenditure that provide long-term returns to the country and its people.
“The government has also set a limit on exposure to financial guarantees at 25% of gross domestic product to ensure government exposure remains under control based on current financial and economic capacity.
“In addition, the government prioritises user-payment-oriented projects through the Public-Private Partnership Master Plan 2030 or Pikas 2030 and reviews the implementation methods of off-budget projects,” he said.
He highlighted that responsible fiscal management, supported by pragmatic economic management, will be able to drive the development of economic activities, private investments and encourage sustainable economic growth.
