Malaysia's parliament approves raising government debt ceiling to 60%
[KUALA LUMPUR] Malaysia's parliament on Monday approved the government's plan to raise its debt ceiling for the first time in more than a decade, as Southeast Asia's third-largest economy grapples with the economic fallout from the coronavirus pandemic.
Parliament voted to allow the government to borrow up to 60 per cent of gross domestic product as part of temporary measures to mitigate the effects of the pandemic on the public and local businesses.
The last time Malaysia raised its debt ceiling was in July 2009 during the global financial crisis, when it increased its maximum borrowings by 10 percentage points to 55 per cent of GDP.
The latest raising of the debt ceiling was part of a temporary bill to enable government financing for economic stimulus packages and recovery plans and related matters.
The government under Prime Minister Muhyiddin Yassin has rolled out stimulus packages totaling around 295 billion ringgit (S$96.7 billion) this year to help the public and businesses weather the pandemic, finance minister Tengku Zafrul Aziz said when winding up the debate on the bill in parliament.
That includes a fiscal injection of 45 billion ringgit, which raises Malaysia's debt ceiling to 56 per cent, he said.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Malaysia's economy plunged 17.1 per cent in the second quarter, its first contraction since 2009, as the pandemic ravaged business activity. Malaysia's central bank expects the economy to contract by between 3.5 per cent and 5.5 per cent this year as a whole.
Measures under the bill expire at the end of 2022.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
China finance ministry echoes Xi’s call for bond trading at PBOC
Bank of Japan to hold rates with focus on hawkish signals to buoy yen
Blackstone-owned Crown Resorts can keep Sydney casino licence, regulator says
Silent and brooding, Trump endures courtroom ordeal
China wants everyone to trade in their old cars, fridges to help save its economy
Japan’s factory activity declines slow, PMI shows