Instead, he said, IMF was confident of the country’s growth prospects.
S&P Global Ratings also expects Malaysia’s economic policy formulation will put the country in a stronger fiscal position, he said.
The finance minister said this in a video uploaded on his Instagram account in response to a viral video on social media that said Malaysia needed financial aid from IMF as it was facing bankruptcy.
Tengku Zafrul dismissed the viral video as nonsensical, adding that the government had never hired or appointed any party to manage its finances.
The important thing was that Malaysia was disciplined in paying its debt obligations, he said, pointing out that Malaysia had never failed to pay debts that had matured.
“IMF itself has acknowledged that Malaysia’s debt level is at a manageable level, so is IMF being paid by consulting firms to say this?
“Compared to other countries, Malaysia’s economy remains strong although it has to face pandemic challenges and geopolitical tensions that have resulted in higher energy and food prices
“So the possibility for the country to go bankrupt and needing to borrow from IMF is completely not true,” he said.
Tengku Zafrul said that as of the end of June 2022, the national debt level was about 60%, far lower than the statutory debt ceiling of 65%.
“The ability of a country to expand its borrowings does not merely depend on the debt to gross domestic product ratio, but its ability for indebtedness and the sustainability of the debts.
“Once again, the country’s economic fundamentals are solid, and third quarter growth will be even better,” he elaborated.
He also noted that individual bankruptcy cases in the country have not risen, instead, they have been on a downtrend since 2016.
“This included the period of rising overnight policy rate in 2018, where bankruptcy among youths also showed a downtrend in that year.
“A total of 5,283 bankruptcy cases were recorded, which declined to 3,948 cases in 2019, 2,844 in 2020, 1,884 cases in 2021, and 515 from this past January to April,” he noted.
Borrowers were also gradually exiting loan repayment aid programmes and this trend showed improvement in the first quarter where it rose to 92% from the repayment rate before the pandemic, he said.
The claim that the unemployment rate is rising is also not true. “The unemployment rate showed a decline, whereby in April and May, it was at 3.9%, June (3.8%), and July (3.7%), the lowest compared to the highest level in May 2020 at 5.3%. It has been going down for 12 straight months,” he added.