National debt at RM1.1 trillion in 2018

Special Select Committee on the Budget chairman Mustapa Mohamed.

KUALA LUMPUR: Malaysia’s national debt rose to RM1.09 trillion in 2018 from RM1.08 trillion in 2017, based on accrual accounting, says Mustapa Mohamed, chairman of the Special Select Committee on the Budget.

He said the amount comprises federal government debt (RM741 billion), debts guaranteed by the federal government (RM132.7 billion) and 1MDB’s net debt (RM32.2 billion).

The amount also includes other liabilities, comprising public-private partnerships, private finance initiatives and PBLT Sdn Bhd, a unit under the Minister of Finance Inc, amounting to RM184.9 billion.

The government adopted accrual accounting in 2011, in line with the International Monetary Fund’s guide on Public Sector Debt Statistics which applies the same method.

It began the process of migrating from cash-based accounting to accrual accounting in 2015, to be completed in a year or two, Mustapa added.

Accrual accounting takes into account total assets and liabilities, including future liabilities, while cash-based accounting only looks at transactions.

“The difference between then and now is that the committee has decided that we need to take liabilities into account as the government is obliged to pay,” Mustapa told a press conference on the first statement on the government’s debts and liabilities for the 2018-2020 session here today.