Govt debt went up to RM1.173 trillion in 2023, says Auditor-General

KUALA LUMPUR: The Federal Government's debt was recorded at RM1.173 trillion in 2023, an increase of RM92.918bil or 8.6% compared to RM1.080 trillion in 2022, says the Auditor-General’s Report.

In the Report 3/2024 released on Monday (Oct 14), the debt consists of Domestic Loans amounting to RM1.143 trillion or 97.5% of the total Federal Debt, and Foreign Debt totalling RM29.851bil or 2.5%.

"Domestic Loans increased by RM92.580bil or 8.8%, while Foreign Debt rose by RM0.338bil or 1.1%.

"The Federal Liabilities position at the end of 2023 showed an increase, with the Federal Liabilities to GDP Ratio at 81.8% compared to 78% in 2022.

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"This is due to the nominal GDP growth rate in 2023 being 1.6% slower compared to 15.8% in 2022. The Federal Debt to GDP Ratio in 2023 was 64.3%, up from 60.2% in 2022.

"Guarantee Commitments also increased by RM3.288bil or 1.5% to RM227.404bil compared to RM224.116bil in 2022," the report stated.

The report also mentioned that to improve Federal Debt management, the government implemented fiscal reforms with the approval of the Public Finance and Fiscal Responsibility Act 2023 (Act 850) in Parliament on Oct 11 last year.

The Report also advised that the Federal Government should pay serious attention to new borrowings.

This step is aimed at focusing on financing loan repayments that will mature, as the Federal Government needs to allocate funds to repay maturing loans totalling RM773.750bil over the next 10 years.

The audit recommends prudent federal debt management to reduce debt and liability exposure and monitor rationalisation and consolidation efforts.

The targets are set for a deficit not exceeding 3% of GDP, national debt not exceeding 60% of GDP, and Financial Guarantees not exceeding 25% of GDP, aligning with fiscal objectives under Act 850, the report said.