THE chances of Malaysia going bankrupt like Sri Lanka is “extremely slim”, the House was told.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the International Monetary Fund (IMF) had never mentioned any economic problem faced by Malaysia that could result in bankruptcy, instead expressing confidence in the nation’s economic growth.
“In late April, the IMF said it was confident at the prospect of Malaysia’s economy expanding by 5.75% this year. If you compare the economic indicators between Malaysia and Sri Lanka, ours is by far much stronger.
“As such, the possibility of Malaysia going bankrupt like Sri Lanka is extremely slim,” he said when responding to a supplementary question from Datuk Seri Ahmad Maslan (BN-Pontian).
Ahmad wanted a clarification on viral claims on social media that Malaysia would end up bankrupt like Sri Lanka based on the national debt.
Zafrul assured that the government continued to be prudent when managing the nation’s finances and debts.
He said the nation’s ability to borrow more money to help the rakyat was not based on the existing national debt.
He pointed out that Malaysia’s debt was 63% of the national GDP compared with Japan’s 263% and Singapore’s 133%.
“The ability of a country to increase borrowings is not solely dependent on the debt ratio against the GDP, but more importantly, it is on debt affordability and sustainability,” he said.
He said Malaysia’s current debt service ratio was at 16.3%, which was expected to increase to over 18% this year.
“This means that for every ringgit obtained by the government as revenue, almost 20 sen will be used to service the debt interest, which does not include the principal sum,” he said.
The minister noted that this was much higher than the debt service ratio of countries such as the United States, the United Kingdom and Japan.
Earlier, to a question by Wong Hon Wai (PH-Bukit Bendera), Zafrul denied claims that subsidies were being reduced, saying the government was expected to fork out RM37.2bil in subsidy for petrol, diesel and liquified petroleum gas (LPG) this year compared with RM13.2bil last year.
He said the government was providing RM4bil in subsidy for cooking oil compared to RM2.2bil last year, with subsidies for other essential goods having increased to RM9.7bil compared to RM1.1bil.
