PETALING JAYA: Former prime minister Najib Razak said stating that the country’s government debt to GDP is now 65%, which is a big jump from the official 50.9% figure, and saying our debt is now RM1 trillion, without giving any details, will just unsettle the financial markets.
It will also alarm the credit rating agencies and affect investors’ confidence in our institutions such as Bank Negara Malaysia, he added.
“There must be a clear distinction between political narrative and facts.
“Mixing them will create doubts on the credibility of our numbers and the professionalism of the institutions that were involved in preparing them, governed by Malaysians laws and international standards,” he said in a Facebook posting titled “Political narrative or facts?”
Najib said as a result of these “alarming and confusing statements”, the Bursa Malaysia index fell the most among all worldwide stock markets, resulting in tens of billions of ringgit in market value wiped out in one day.
“Our Bursa index fell 40.78 points today or 2.21% while the Indonesian stock index added 0.71%.
“The business news portal, The EdgeMarkets, said this sharp fall in our share market was contributed by concern on our public debt.
“Surely this fall would affect our funds such as EPF and PNB and could lower the dividend rates for its members for the year.
“Issuing statements that we should not worry about our country’s sovereign credit ratings being downgraded will result in further rocking the confidence in our institutions.
“A downgrade will result in higher debt financing costs of RM10 billion per year to our country and may result in our banks, which had borrowed from the international markets, sustaining losses.
“It may also result in large capital outflows from foreign investors and cause our ringgit to weaken,” said the former finance minister.
“While you may want to slander and put all the blame on me to give a perception of a dire financial position to justify why you cannot deliver on your manifesto promises and to massively cut the civil service, you must remember that the country and our people comes first.
“You can also issue misleading statements on 1MDB or tell half the story about it to blame me but the time to play politics is over.”
Najib said words spoken while in such positions of power may result in actual losses to the country and the people, “as was proven today in the stock market”.
“It is no longer just about votes any more.
“Words said and allegations made while in the opposition carries a very different weight now that you are in power and holding the positions of the finance minister or the prime minister.”