Bernama: Government debt at RM362b as at Dec 31, 2009

Government debt at RM362b as at Dec 31, 2009

KUALA LUMPUR, April 22 — The government’s overall debt as at Dec 31 last year was RM362.4 billion or 53.7 per cent of the gross domestic product (GDP).

Prime Minister Datuk Seri Najib Razak (picture), who is also Finance Minister, said a major portion of the debt was domestic debts amounting to RM348.6 billion or 96.2 per cent while the remaining RM13.9 billion (3.8 per cent) was external debts.

“The small amount of external debt is in line with the government’s current policy which prioritises domestic borrowings to finance the country’s development projects as the cost is cheaper and there is less exposure to foreign exchange risk,” he said in a written reply to a question from Liew Chin Tong (DAP-Bikut Bendera) at the Dewan Rakyat sitting here today.

Liew had asked on the direct financial obligations of the government in the form of financial guarantee for debt instruments.

Najib said the debt instruments were subscribed by financial institutions, insurance companies and social security institutions.

On the borrowings for projects, he said the financiers were multilateral institutions such as the World Bank, Asian Development Bank and Islamic Development Bank while the bilateral institutions included Japan For International Cooperation (JBIC).

He said the interest rates varied and depended on the tenure of the loan and the prevailing market conditions when the bonds were issued.

Najib said the government’s contingent liabilities meanwhile were in the form of guarantees for the borrowings of statutory bodies and government companies.

As of Dec 31, 2008, the contingent liabilities of the government stood at  RM69.2 billion comprising domestic borrowings of RM59.3 billion (86 per cent) and external borrowings of RM9.9 billion (14 per cent),” he said.

He said the guarantees involved two statutory bodies and 16 government-linked companies.


--Bernama