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Malaysia’s Debts Considered Manageable, Najib Says

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KUALA LUMPUR: Malaysia’s debts totalling RM596.8bil are deemed manageable and moderate.

Prime Minister Datuk Seri Najib Tun Razak (pic) said the debts represent 51% of the gross domestic product (GDP) of which 97% or RM579.2bil are domestic debts while RM17.6bil are foreign debts or three-percent of the total.

“A large portion of the debts are in Government bonds issued domestically totalling 72.4% which are held by major institutions while 27.6% are held by foreign investors,” he said in a written reply to a question by Datuk Mohd Zaim Abu Hasan (BN-Parit) in Dewan Rakyat on Monday.

Najib, who is also Finance Minister, added that among the domestic debts were Employees Provident Fund (21.3%), Pensioners Fund (3.9%) and local banks (26%).

He said the repayment of the debts is based on scheduled repayments fixed by bond holders, sukuk and debt restructuring.

“The Government is committed to ensure that the debts do not exceed 55% of the GDP.

“To achieve this low and manageable debt threshold, the practice of fiscal consolidation will be continued, aimed at reducing the debts in stages,” he said.

Najib added that the steps taken would reduce the Government’s reliance on borrowings and lower its debts.

He said focus would be given to fiscal discipline and proper debt management to ensure the nation’s macroeconomy remains strong and able to face any crisis.

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