The Malaysian Government has initiated legislative moves to jack up the country’s public debt ceiling from the current 60 to 65 percent of GDP.
To achieve this fiscal objective, the country’s Ministry of Finance on Wednesday submitted the Bill of Interim Financial Measures, which proposed to raise the public debt ceiling from the current 60 to 65 percent of GDP, to the National Assembly..
Defending the government’s proposal , Finance Minister, Zafrul Aziz, said that by raising the public debt ceiling, it would provide the Malaysian government more fiscal space to support the reopening of the economy and ensure a stable recovery.
In addition, he explained that raising the public debt ceiling also aligned with the government’s commitment to fiscal consolidation measures in the medium term, adding further that along with that, the proposed Fiscal Accountability Act (FRA) will also help improve governance, transparency and accountability in national fiscal management.
The minister maintained that the government’s current priority was to protect people’s lives and ensure that the country’s economic growth prospects remain strong in the medium and long term.
Aziz further pointed out that these priorities were in line with the core targets of the 12th Malaysia Plan (12th MP) and the Commonwealth Vision 2030, and also based on sound principles of financial management.
The minister further clarified that to ensure there is adequate financial space to implement development programmes under the 12MP framework, the government was fully committed to implementing fiscal consolidation measures based on the medium-term fiscal framework, including a medium-term budget collection strategy to expand tax revenue and increase debt solvency.
