Central govt debt balloons to RM388bn

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By the end of 2009, total federal government debt had soared to RM362 billion – a leap of RM56 billion from the previous year.

Much of this was due to soaring domestic debt, which reached RM349 billion or 96 per cent of the total federal government debt, according to the national audit report for 2009. Total federal government debt to GDP ratio rose to 53.7 per cent – exceeding 50 per cent for the first time in recent years.

Bank Negara reports that central government debt (total current liabilities) reached RM378 billion in the first quarter of 2010 and RM388 billion in the second quarter.

The previous years’ figures for federal government debt:

2005 – RM229b (46.2% of GDP)
2006 – RM242b (42.3%)
2007 – RM267b (42.8%)
2008 – RM306b (41.4%)
2009 – RM362b (53.7%

Now this rising trend should be cause for concern.

The country’s gross external debt (including the central government’s foreign debt of RM17 billion) stood at RM251 billion in the second quarter of 2010 – up from RM247 billion in the previous quarter.

International reserves, on the other hand, reached RM323 billion as at 15 October 2010.

For your homework(!), work out the per capita debt for each one of us.

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colin

Dear Anil, this is a very interesting article, and sobering. I’ve always felt that it was your articles in the Herald that contributed to the Home Ministrys antagonism towards it.

Can you please enlighten us on 2 things please?

What is the current credit rating for MGS papers? And just who is the creditor holding all these MGS papers?

Thank you.

flyer168

Just to share this…

Money matter – http://www.malaysia-today.net/mtcolumns/from-around-the-blogs/42682-money-matters

The points are these:

1. While our foreign debts decreased from RM236.18b in 2008 to RM233.92b, our domestic debts increased from RM217b in 2006 to RM371b in 2010.

2. Between 2006 to June 2010, our gross domestic product grew at an average of 6.6% while the total debts grew at an average of 10.2%.

3. Total debts to GDP ratio therefore increased by 39% from 64% in 2006 to 73% in 2010.

What the above means is that “we are borrowing faster than we are producing income”….

Salak

Don’t mind buying all Malaysian debt for RM500.00!

Ponti

Yen Yen’s personal travel bills to 26 countries as Tourism Minister amount to RM3.25m in 2009 & 2010.

Did her family travel with her?
MACC must check.

It is rakyat’s money afterall.
I think it is too much. She shoudl use budget airlines and stay in low cost motel.

Samad

The PM wants to build 100-storey tower as to signify his glory like what Tun did with the twin tower. He wants this project starts immediately as he knows that his days are numbered in UMNO. Even if Pakatan fails to take over the government next GE, that doesn’t mean he can sit well on his chair. he care less if the country deficit is growing.

Kamal B

Year after year AG has been reporting lots of mismanagement/abuse and wastage of public fund.

it is no surprise that Anti-graft watchdog Transparency International (TI) announced that Malaysia’s Corruption Perception Index (CPI) score declined from 4.5 to 4.4 out of 10, with 10 being the least corrupt.

Iman

Government domestic debt may not be too big a problem.
Just print more money, (of course with hefty commission from Australia), and re-pay.
Foreign debt however might be a problem if getting out of hand.
Measuring against GDP is a way of fooling the most.
GDP increases by 6 % as well as the debt, it shows up as no increase.
Perhaps why they need the GDP to grow at least 6% annually???

Sewel

Aiyah as one UMNO official said, “Why worry thats gomen problem not my problem”. The UMNO official said later he want to make sure us Malaysians all must study history now. Yup it is compulsory! Don’t worry about the debt mah! learning UMNO history more important then good house keeping or learning economics ok. Aiyah as long as petronas is there pumping billions into government projects like the 100 storey UMNO historical tower why worry? The billions of dollars in debt is a small matter lah. the most important thing is Anwar masuk jail first because of sodomy part 2.… Read more »

DAP = UMNO

Why you care so much for central government debt when the Malaysian Household Debt is #1 in the whole Asia !!!

vflai

………lately, a proposal by the housing minister on buying a house on a ‘2 generation’l loan????!!!!smart guy but not enough brains, for at that rate/long time , he/she(house owner)may never live that long enough to settle the final debt(installment)what with all the worries, occasional medical bills (to be paid if not a govt servantthe food bill rising, petrol prices high and endless woes of sending their children to school, let alone be able to, at the end of it buy a humble co..in to bury himself..is that what the housing minister want us all to do…..be burdened by such stupid… Read more »

tunglang

They … leeches already envisioned ‘nice and proper for their pockets’ what’s in store for us the fools. The housing matter is already carved in gold minted stone for the gravy train selected passengers and Housing Minister to luxuriate for life at the expense of the ordinary hard-working and sweating-to-the-bones Rakyat. In cohorts with the developers, bankers, housing agents, property speculators and you know what, prices of homes in Malaysia will never be the same again. It’s all money talks for those with the right connections, leads and Kang Tau within these leeches circle of greeds. Where is their sense… Read more »

Gerakan K

hello, tunglang

are you OK ???

what’s wrong with government helping ordinary people getting his first house with 100% loan ???

Are you jealous or what ??? Or you have plenty of houses that failed to rent to the people ???

tunglang

Do you understand the arithmetics of compounding interest?
Paying for a house manifold the original price in order to finally own it in the graves is utter foolishness. Why must the children continue paying to the banks’ coffers for an inheritance?
Ask Robert T. Kiyosaki (Rich Dad, Poor Dad) for an enlightening investment strategy for your own sanity! And if you like to make the bank rich with your home loan, why not pay for 3 generations, as each month’s commitment is peanut while you and your children’s children can continue to own only ONE house after 3 generations!

Kacau Kacau

Disclaimer first, I’m no fanboy of BN nor “Najibconobull…” but if you check out the national debts of various major economies of the world, 53% is actually a relatively low figure. For developing countries, 50%-100% of GDP is considered normal. While for developed countries it can be as high as 200% of GDP (e.g. Japan).

It is not the 53% figure that worries me but the disproportionately high percentage of the amount is local debt. And also the worst part is the extremely high percentage of the budget allocation on “administrative” rather than for developement.

Gempak

The government is ‘promoting’ living on credit e.g. 2-generations housing loans. Already credit card defaulters are on the rise.

baharudin

This is how Utusan Malaysia made its report:

“Laporan Jabatan Audit Negara menyatakan prestasi kewangan Kerajaan Persekutuan bagi 2009 adalah lebih baik berbanding 2008 dengan catatan lebihan dana berjumlah RM6.32 bilion”

Truth is never told in Utusan.
Rakyat ditipu!!!

Lokman

So Idris Jala is using old statistics and he thinks 2019 we will be BANKRUPT, now based on theis new number and the ETP we will be BANKRUPT IN 2015!!! Mati lah ini macam. Time to leave for other countries, Singapura?

Why are the AG’s numbers different from the PM’s numbers? We have been clearly lied to again and again and some morons never ever learn their lesson and keep returning BN to power. People who vote for BN really deserve to be screwed & don’t deserve any pity.

Juliana

Anil

Please provide highlights to the 2009 AG reports to showcase the wastage by the government.

It is certianly a contributing factor to the national debt.

tunglang

It won’t take 20-50 years to bankrupt our nation…. It just take ONE greedy, irresponsible administration of our national coffers to bankrupt the nation in ONE term. In 3 years time we can forget our dream of high income nation 2020 if we continue to be in miserable debts accumulation and consequently in servitude under the puppet strings of the World Bank creditors willing to take over the country – people, assets and natural resources.
To be FREE is to be debtless, can we?

The rich rules over the poor, and the borrower becomes the lender’s slave.
Proverbs 22:7

Mohd Nassim

AG Report exposes Najib lie. In 2009 national debt of RM362.39b is 53.7% of GDP – not RM233.92b or 34.3% of GDP as announced by Najib in 2011 budget. Therefore be careful and do not just accept all the things he said to buy your votes.

This is the end result of corruption and lack of enforcement by parties entrusted with responsibilities to safeguard the public interest. The whole system is so corrupt that you can’t imagine the burden on those who will be tasked with reform should an alternative government be elected in the next general elections.

Gerakan K

Funny reaction from opposition fanboys and gals !!!

Those debts have maturity date between 20-50 years !!!

And Malaysia never bankrupt under BN administration.

Ostrich K

You should say “Malaysia will soon bankrupt under BN administration”.

Build the 100-story building only to be acquired later by CapitalLand of Singapore…

DAP = UMNO

Do not be so sure.

Capital Land of Singapore is not as soh hai as the UMNOputras.

No one would want a 100-storey tower which is located in a place with very poor access roads.

vflai

……central govt. debt RM388b???!!!!!yes, our ‘harbinger’ Idris Jala, you are correct, correct correct ….our country, constantly ‘going to the dogs’ WILL be BANKRUPTED in about 9 years time?….right now,it looks as if our country’s decline is STEEPER than the last portion of the road to Genting Highlands….it is so very SAD to know/acknoledge, that our once beloved beautiful, bountiful country is going BANKRUPT….now WHO is to be blamed, that every 5 year term, a certain ‘facvourite’ perceived saviour-typed but NON-ALTRUISTIC political party is voted IN, each and every General Election?…..up till now,it is very very unfortunate/sad, to say that, the… Read more »

Jonathan

Malaysia’s cerita dongeng…is slowly but surely turning into a Greek Tragedy….every Malaysian must start having a Sing or Aussie account…..

Francis Ngu

Note. 1. Even with doubling of per capita income in 10 years, real incomes might have dropped from high inflation arising from minimum wage, GST and imported inflation, especially food prices. 2. Other newly emerging economies may increase their per capita much more than twice in 10 years, still leaving us as laggards. 3. High Income defined by the standards of developed countries is in the order of US 150K or higher per annum. In Australia, the starting pay of a new graduate may be as high as AU $60 K per annum, this regarded as just above low income… Read more »

Anonymous

Central govt debt RM388b?…this is just a conservative figure, dig deeper, we are safe to add another 30% above this figure. Can you ever trust UMNOputras?

Gempak

Prime Minister Najib Razak’s recently announced Budget 2011 has revealed shocking details about the amount of money put into the “rental and maintenance” of the official residences of the country’s top politicians. It’s RM26,000 a day to maintain homes of PM, DPM…

Ong Eu Soon

Don’t worry we can just lelong and sell this Bolehland to any high bidder.
Hi Ganesh, wake up from your dream! What high income nation? High in-debt nation, we already achieve this status!

Kumaran

Yes, no need to worry.

Najib will take 2-generations loan from World Bank.

Ganesh

How to become High Income nation like this? If government got this kind of debt, how want to increase of GDP per capita in the future to Singapore levels?

Don’t forget, by 2020, Singapore GDP per capita levels will be even higher than their current GDP per capita. Singapore and the world won’t remain stagnant. They will grow at their current fast pace.

So how to compete?

By 2020, even if we do reach the target, Singapore will probably be US$100,000 GDP per capita.