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78,132 views 10 Oct 2023 Is Malaysia's escalating national debt a ticking time bomb or a misunderstood tool for economic growth and stability? Explore contrasting perspectives, from Prime Minister Anwar Ibrahim's debt-reduction approach to insights from Modern Monetary Theory. For image info, go to
https://www.youtube.com/watch?app=desktop&v=kS_08qWgMvE (Malaysia's $350 Billion Debt Crisis, Explained)
Malaysia - a more than RM3 trillion debt-ridden nation
KUALA LUMPUR, March 19, 2024: Malaysia’s 10th Prime Minister (PMX) Anwar Ibrahim yesterday revealed that household debt was at RM1.53 trillion as of last year.
He told Parliament in a written reply that household debt had been growing at 5.1% annually.
And with the national debt of more than RM1.5 trillion, Malaysians are living in a high debt-ridden economy and country.
Is that bad for Malaysians and Malaysia? There are varying arguments with some economic and financial analysts saying debt is not always bad.
However, the fast depreciating value of the Ringgit is certainly worrying and unsettling.
No News Is Bad News reproduces below a news report on Anwar’s parliamentary written reply:
Household debt at RM1.53 trillion as of last year
-18 Mar 2024, 11:43 PM
Prime Minister Anwar Ibrahim says there has been a 5.1% annual growth in household debt from 2018 to 2023.
Housing loans made up the largest portion of the country’s total household debt, followed by vehicle loans and personal financing.
PETALING JAYA: Malaysia’s aggregate household debt stood at RM1.53 trillion at the end of 2023, said Prime Minister Anwar Ibrahim.
Anwar, who is also the finance minister, said housing loans made up the largest portion of the country’s aggregate household debt at 60.5%, followed by vehicle loans (13.2%) and personal financing (12.6%).
Aggregate household debt for previous years was RM1.45 trillion in 2022, RM1.38 trillion in 2021, RM1.32 trillion in 2020, RM1.25 trillion in 2019, and RM1.19 trillion in 2018.
“The household debt-to-GDP ratio at the end of 2023 also increased slightly to 84.2% compared to 2018 (82%),” he said in a written parliamentary reply.
He was responding to a question from Pang Hok Liong (PH-Labis) about the country’s aggregate household debt from 2018 to 2023.
Anwar said there had been a 5.1% annual growth rate in household debt from 2018 to 2023.
He said this was mainly driven by housing loans and vehicle loans following various home ownership incentives offered by the government and the private sector, as well as sales and service tax (SST) incentives for the purchase of motor vehicles between 2020 and 2022.
Separately, deputy finance minister Lim Hui Ying said during the question-and-answer session that Bank Negara Malaysia (BNM) was taking a cautious approach to risks associated with household debt to ensure they will not have a negative effect on the country’s financial system.
Apart from ensuring that individuals borrow based on their ability to repay within the stipulated period, she said, BNM is working to improve the public’s financial literacy level and encouraging households which have substantial borrowings to follow the Credit Counselling and Debt Management Agency’s (AKPK) online financial education programme.
Malaysia's national debt now at RM1.5 trillion, or over 80pct of GDP
By Teoh Pei Ying, Farah Adilla - January 17, 2023 @ 10:01am
Malaysia's national debt including liabilities has reached RM1.5 trillion. NSTP/AIZUDDIN SAAD
PUTRAJAYA: Malaysia's national debt including liabilities has reached RM1.5 trillion and should be addressed urgently, Prime Minister Datuk Seri Anwar Ibrahim said.
This was already more than 80 per cent of the country's gross domestic product (GDP).
The figure also suggests that Malaysia's budget deficit will widen further than the earlier estimate of 5.8 per cent of the GDP for 2022.
"The economic uncertainties are still not easing. The economy is still considered dim and this was also contributed externally including the Ukraine-Russia conflict as well as global recovery post-Covid.
"The problem with our debt is it has already touched RM1.2 trillion and if includes liabilities, it is RM1.5 trillion.
"We have to accept this reality. We cannot feel complacent, living with the culture of contentment as if there is no problem," Anwar said during the 2023 Budget dialogue here today.
Also present were deputy Finance Ministers Datuk Seri Ahmad Maslan and Steven Sim Chee Keong, as well as deputy secretary general of treasury Datuk Johan Mahmood Merican.
The new 2023 Budget is expected to be tabled in the Parliament on Feb 24.
The original 2023 was presented on Oct 7 by the then finance minister Tengku Zafrul Abdul Aziz with a total allocation of RM372.3 billion but was not approved due to the dissolution of Parliament three days later to make way for the 15th general election (GE15).
Anwar was reported to have said that the government will look at the proposals in the budget tabled by the previous government and make the necessary changes before tabling his government's budget.
Meanwhile, Anwar said it had taken him only two months in the office to recognise that the government would be able to save around RM10 billion from leakages from its procurement system.
Hence, he said the mandate of the unity government remained - to change the orientation of the system in order to ensure that the vast majority of citizens benefit from economic initiatives and reforms.
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