Federal government’s domestic debt doubles in last five years


The federal government’s domestic debt has soared from RM217bn in 2006 to RM438bn in 2011.

Source: Bank Negara

Much of the extra debt has been raised from investment issues and issues of government securities (including a noticeable rise in foreign holders).

The government, however, says nothing to worry, the total federal government debt is only 53.5 per cent of GDP, still below the critical threshold of 55 per cent.

But see how even that ratio has been rising over the years.

Now, most of the federal government’s debt is domestic, but even then, the sharp rise in recent years is cause for concern.

Mind you, this does not include outstanding debt/loans guaranteed by the federal government.

The rising debt level is partly due to the country’s persistent fiscal deficits over the last 15 years:

Source: theedgedaily.com

But how are we going to reduce our fiscal deficits when we keep slashing income tax and corporate tax while doing little to curb rampant corruption, cronyism, ‘leakages’, wasteful spending and bloated government department budgets?

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21 May 2012 11.55pm

EXCESSIVE of INTERNAL debt = oversupply of money = INFLATION. And pray hard inflation does not deteriorate further and become super inflation.

17 May 2012 12.05pm

When you look at any balance sheet, the problem is not just the debt – you have to look at how its suppose to be paid off. Keep in mind this increase debt is being paid off from oil & gas revenue – a commodity with limited supply and highly unpredictable. Its how Latin America got into trouble back in the late 1970s to 1980s. Even if history did not repeat itself, the borrowing cannot grow meaning that when you look at everything that UMNO/BN has done with these debt over the last few years – the mega projects, the… Read more »

17 May 2012 4.15pm
Reply to  bigjoe

With ‘high-end’ corruptions, these Barang Naiki minions cannot afford not to have more taxes & ‘new form’s of revenues to ‘spend’ for fulfilling their ‘hard-to-relinquish’ habits.
Go visit the Ah Pom seller to see how he cooks & you will understand how Barang Naiki does it so well with Ah Kong’s monies.

Ahmad Sobri
Ahmad Sobri
16 May 2012 4.13pm

The only way to arrest the continued decline in every sector of society in Malaysia is to go for regime change! Double in 5 years? What will happen if this continues another 5 years? We will then perhaps carry sacks of ringgits to purchase groceries at TESCO? The reality is we cannot afford another five years! Pakatan through the DAP in Penang had shown and proven what it can do! It reduced its debts by 95% in less than five years and BN doubled its debts in 5 years. The results and comparisons are all too clear folks! While Pakatan… Read more »

semuanya OK kot
semuanya OK kot
16 May 2012 3.09pm

Our MPs are also responsible, They have rubber-stamped extensions of the current annual national budget twice so far.

semuanya OK kot
semuanya OK kot
16 May 2012 3.04pm

4 to 5% is just our current account deficit compared to GDP. Government borrowings alone are around 45 to 50% of GDP.

To correct a situation, first you need the facts. There seems to be a determined effort to conceal the true debt including government guarantees, GLC borrowings and GLC guarantees.

Lim GP
Lim GP
16 May 2012 2.11pm


Should the federal government’s debt grow at a rate of RM50 billion annually, it could reach RM1 trillion in 2020, said independent think-tank Research for Social Advancement (Refsa).
The current deficit stands at RM437 billion, which Refsa points out is more than double the RM217 billion budget deficit reported in 2004.
“Put another way, the government has added on more debt in the six-and-a-half years since 2004 than in the 47 years following Merdeka,” reads the paper.
Between 2007 and 2011, the deficit has been growing at about RM34 billion annually on average.

Buttock Brainy
Buttock Brainy
16 May 2012 1.50pm

Deficit? Najib in election moneying spree mode, 500 BR1M here, few millions there, money everywhere, just pulled it out from the air. They can spend, buy the way into votes, spend the way into anything, money is The tool among all tools. Economy? livelihood of people? governance?. As long BN wins the elections, as long race and religions stay as key political consideration, BN stays, all cost justified. Why change? the majority are with BN. When majority starts from 18% of voters, EC, MSM and PDRM as BN’s political power tools then nothing get changed, except your lifestyle and accept… Read more »

Krishna Subra
16 May 2012 12.54pm

SO SICKENING! pity those who still relies on this government for better future