Credit ratings still strong despite govt debt, says Guan Eng

Finance Minister Lim Guan Eng says the government has been open and transparent on the true extent of the nation’s debts.

KUALA LUMPUR: Finance Minister Lim Guan Eng today addressed concerns over the government borrowing RM58.1 billion in the first six months of the year, saying international rating agencies and foreign investors continue to have confidence in Malaysia.

Lim said the agencies have not downgraded Malaysia’s A3 credit rating, despite Putrajaya revealing the full extent of their fiscal and debt obligations.

“We are open and transparent, that is why we reveal the true extent of our debts. Not just the debts but also contingent liabilities and government guarantees.

“Despite that, our total commitment, which does not only include direct debts but also government guarantees and contingent liabilities, has successfully been reduced from 80% to around 75% of the GDP,” Lim said after launching AirAsia Foundation’s “Destination Good” Shop at RexKL on Jalan Sultan here.

Also present were AirAsia group CEO Tony Fernandes, executive chairman Kamarudin Meranun and executive director Yap Mun Ching.

An economist recently urged Putrajaya to slow down on spending, citing Bank Negara Malaysia (BNM) figures showing that the government had already borrowed RM58.1 billion in the first six months of the year.

Barjoyai Bardai of Universiti Tun Abdul Razak said the numbers showed that federal government debt had increased from RM686.8 billion at the end of 2017 to RM799.1 billion currently.

Lim said commitments by the previous government to development expenditures were also the cause for the increase in debts.

He said that Putrajaya would proceed with these infrastructure projects as it would benefit the nation in the long term.

He also said that the government was still paying off debts related to 1MDB.

“You must realise that the previous government hid the fact that they were not actively repaying the 1MDB loans.

“Only after the new government took over that the government actually continued paying off the 1MDB debts,” he said.

Lim said the nation’s economic performance had exceeded market expectations as foreign investors continued to express interest in the country.

On the review of the departure levy, Lim said the Cabinet had made a decision, but stopped short of making an announcement.

“The Cabinet has made a decision and it has been decided that the announcement will be made by the transport ministry,” he said.