Govt still needs to cough up RM17bil to repay 1MDB debt after recovering funds, says Tengku Zafrul

KUALA LUMPUR: The government is still facing a shortfall of RM17bil to repay loans and interest incurred by 1Malaysia Development Berhad (1MDB), says Tengku Datuk Seri Zafrul Abdul Aziz.

The Finance Minister said that the government has so far repaid the company's loans and interest amounting to RM13.31bil from the 1MDB Assets Recovery Trust Fund.

"Presently, there is still a balance of RM15.76bil under the trust fund which is insufficient to repay 1MDB's entire principal loan and interest," he said when winding up his ministerial replies on the motion of thanks in Dewan Rakyat on Monday (March 14).

Tengku Zafrul added that the government was expected to recover RM511mil from Ambank and about RM4bil (US$954mil) from Goldman Sachs.

"This means the government will still face a shortfall of RM17bil to repay back the sum of RM38.8bil for principal loan and interest incurred by 1MDB covering the period from 2023 till 2039," he said.

He also denied recent claims by former prime minister Datuk Seri Najib Razak that the repayment of 1MDB's debts did not involve the use of the rakyat's money.

"Public funds were and are still being used to repay the 1MDB debts," he said, adding that the government was forced to provide loans and advances totalling more than RM10bil to the ministry for the purpose.

On a separate matter, Tengku Zafrul said that the government was still able to meet its financial commitments despite facing recent economic challenges.

He noted that the government had forecasted the fiscal deficit to be at 6.5% of the national gross domestic product (GDP) under Budget 2022.

However, based on better economic performance and revenue, he said the fiscal deficit was at 6.4% of the GDP.

Tengku Zafrul also informed the House that the nation's statutory debt currently stood at 63% of the GDP, which is below the 65% permissible threshold previously approved by Parliament.

He said that the Malaysian Government Securities (MGS) and Malaysian Islamic Treasury Bonds made up 59.7% of statutory debts, totalling RM922bil.

He also reminded lawmakers in Dewan Rakyat that the nation's debt exceeded over RM1 trillion, which was inherited from the previous administration.