PUTRAJAYA (March 18): Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz today said Malaysia’s statutory debt is expected to reach 58.5% of gross domestic product (GDP) in 2021 due to the implementation of the RM20 billion PEMERKASA stimulus plan to safeguard the country’s economic situation. growing impact of the Covid-19 pandemic.
Speaking at a press conference here today, Zafrul said that in February of this year, the country’s statutory debt stood at 54% of GDP.
“The expected figure of 58.5% is still below the statutory debt limit of 60% and the absolute number of public debt is expected to reach 975 billion ringgit,” he said.
“Public debt has three instruments, including Malaysian government bonds (MGS), Malaysian government investment issue (MGII) and Malaysian Islamic treasury bills (MITB),” he said.
Zafrul said the government will exhaust and maximize the use of the 65 billion ringgit cap for the Covid-19 fund approved by Parliament as part of the government’s temporary funding measures (Coronavirus Disease 2019 [Covid-19]) To act.
“PEMERKASA’s RM 11 billion fiscal injection will result in a higher budget deficit for the country this year, but we intend to maximize (use) the Covid-19 fund approved by Parliament as a result,” did he declare.
The national budget deficit is expected to increase to 6% this year, from 5.4% last year, he said. Nevertheless, he remains convinced that Malaysia has the capacity to reduce the deficit through a fiscal consolidation program advocated by the ministry.
Prime Minister Tan Sri Muhyiddin Yassin was reported yesterday to unveil a new round of stimulus packages under the RM20 billion PEMERKASA program after the Covid-19 pandemic brought down the country’s economy last year (2020) since the Asian financial crisis.
Muhyiddin said the government would roll out stimulus packages worth RM 20 billion, including a RM 11 billion tax injection, Reuters reported.
For 2020, the Malaysian economy, measured by GDP, contracted 5.6% from the previous year after fourth quarter 2020 (4Q20) GDP contracted 3.4% in year-on-year, according to the Bank Negara Malaysia (BNM) press release on February 11. , 2021.
“The economy recorded negative growth of 3.4% in 4Q20 (3Q20: -2.6%), largely attributable to the imposition of the conditional movement control order (driven by Covid-19) to a number of states since mid-October.
“For 2020 as a whole, the economy contracted 5.6%. Restrictions on mobility, particularly on inter-neighborhood and interstate travel, weighed on economic activity over the course of the year. 4Q20, “BNM said.