Govt Committed To Maintain Fiscal Consolidation Trajectory - Mof

KUALA LUMPUR, July 15 (Bernama) -- The government is committed to maintaining a fiscal consolidation trajectory with a deficit reduction in 2023 to 5.0 per cent of Gross Domestic Product (GDP) or RM91.4 billion compared to 5.6 per cent in 2022 (RM99.5 billion), said the Ministry of Finance (MoF).

According to the MoF, the fiscal deficit in 2024 is projected to further decrease to 4.3 per cent of GDP or RM85.4 billion.

"The effort is able to improve the public financial position and further reduce the debt burden in the medium and long term," the ministry said in a written reply published on the parliament website on Monday to a question from Datuk Ahmad Amzad Mohamed @ Hashim (PN-Kuala Terengganu) who asked for justification for the increase in government debt of RM64 billion in the four months from January 2024 to April 2024.

For the period from January to April 2024, the government debt increased by RM50 billion to RM1.22 trillion as of the end of April 2024, compared to RM1.17 trillion as of the end of 2023.

"Whereas, for the period from January to April 2024, the government had made gross loans amounting to RM70.5 billion covering the issuance of Malaysian Government Securities of RM30 billion, Malaysian Government Investment Issues (RM34.5 billion) and Treasury bills (RM6 billion).

"This loan receipt was used to pay the matured debt of RM20.6 billion and the remaining RM49.9 billion to cover the deficit during the period as well as the debt that will mature," according to the MoF.

In general, the increase in government debt every year is due to the government's need to borrow to finance the fiscal deficit, which is to cover development expenditure (DE).

"This loan will increase the debt level as long as the financial position experienced a deficit. DE is important because it is a public investment that has a large multiplier effect and high impact in driving the country's economic growth," according to the MoF.

-- BERNAMA