Malaysia PM Anwar expects debt pressure to ease from end-2028

[KUALA LUMPUR] Malaysian Prime Minister Anwar Ibrahim said he expects the country’s debt pressures to ease beginning end-2028, driven by the government’s efforts to reduce its fiscal deficit.

The federal government has reduced new borrowings to about RM75 billion (S$23.6 billion) this year, from RM100 billion in 2021, Anwar said. It could cut it further to RM20 billion next year if state governments did not ask for more allocations, he added.

“This is why the decline must take into account our ability to continue basic projects such as flood mitigation, basic infrastructure, education, health and others,” Anwar said in parliament on Tuesday (Dec 2), in response to a question from a lawmaker.

The government aims to narrow the fiscal deficit to 3.5 per cent of gross domestic product next year, from 3.8 per cent in 2025, by slashing spending on subsidies and boosting tax collection.

Anwar said on Tuesday the government still owed about RM13 billion in 1MDB debt, adding that the state investment fund was the government’s biggest debt burden. The fund, formally known as 1Malaysia Development Bhd, took shape under former prime minister Najib Razak and became a multibillion dollar scandal that spawned probes across the globe. BLOOMBERG