KUALA LUMPUR: After successfully reducing the fiscal deficit to 4.1% last year, the government is now committed to lowering it to 3.8% this year, says Finance Minister II Datuk Seri Amir Hamzah Azizan.
Amir Hamzah said when Prime Minister Datuk Seri Anwar Ibrahim’s government came to power in 2022, it inherited a debt burden of RM1 trillion.
At the end of last year, the country’s debt stood at RM1.2 trillion or 64% of gross domestic product (GDP).
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“As long as the government continues to spend at a deficit, debt will continue to rise,” he said while tabling the Supplementary Supply Bill for the second reading in the Dewan Rakyat on Monday (March 3).
“As Malaysia has been experiencing a deficit since 1998 until now, the government has been borrowing every year to fund its fiscal deficit to cover development expenditure,” he added.
He said the government has enough revenue to cover operating expenditure and has been consistent in reducing its fiscal deficit from 5.5% in 2022 to 5% in 2023.
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Last year, Putrajaya narrowed the fiscal deficit to 4.1%, exceeding its target of 4.3%.
“The government remains committed to reducing the deficit to the projected 3.8% in 2025 and subsequently to achieve the commitment of 3% by the end of 2028 as outlined in the Public Finance and Fiscal Responsibility Act 2023,” he said.
According to Amir Hamzah, the growth of annual debt has also been on a downtrend, from RM100bil in 2022 to RM92.6bil in 2023 and subsequently RM77bil last year.
He said the government is on track to reducing the debt to not more than 60% of GDP.
