National debt at RM257.2b in 2011

KUALA LUMPUR, May 8 — The country’s national debt at the end of last year stood at RM257.2 billion or 30.2 per cent of Gross Domestic Product (GDP), the Dewan Negara was told today.

Deputy Finance Minister Senator Datuk Donald Lim Siang Chai said the country’s national debt or external debt was debt borne by the country following loans obtained by the government and the private sector from overseas sources.

“It comprises the external debt of the federal government, non-financial public enterprises and private sector,” he said in reply to Senator Datuk Paul Kong Sing Chu and Senator Datuk Abdul Rahman Bakar.
Lim said the federal government’s total debt was RM456.1 billion or 53.5 per cent of GDP.

“Of the total, RM438 billion or 96 per cent was domestic debt while the balance RM18.1 billion or four per cent was external debt.

“The low external debt was in tandem with the government’s policy to give priority to domestic borrowing as the market had high liquidity, the cost of  borrowing was lower, and to minimise foreign exchange risk,” he said.

Lim said the federal government’s domestic debt sources were treasury bills, investment certificates, government securities, the Housing Loans Fund, issuance of Sukuk Simpanan Rakyat and Sukuk 1 Malaysia.

He said the holders of such instruments comprised financial institutions, insurance companies and institutions like Employees Provident Fund and Social Security Organisations.

He said sources of external debt were the international capital market through issuance of global sukuk, draw down of project loans from multilateral institutions like the World Bank, Asia Development Bank and Islamic Development Bank, and also bilateral borrowing in foreign currencies such as the US dollar, yen, euro, Canadian dollar and dinar.

“The government is committed to ensuring the debts are repaid according to schedule and so far, repayments are in order.

“This is the result of a prudent debt management approach. Last year, total debt service was RM17.7 billion or 9.7 per cent of the management expenditure,” said Lim.

In reply to Datuk Syed Ibrahim Kader, he said specifications for the new coins were in line with the finding of research conducted by Bank Negara Malaysia.

“The research was done between January and April 2009 covering discussions with the public, traders and other parties such as banking institutions and cash machine operators.

“The study’s crucial finding is that people prefer smaller and lighter coins compared with the previous ones,” he said.

He said the trend to reduce the size and weight of coins was among major strategies adopted by central banks in enhancing technical specifications when introducing new coins. — Bernama