Fed Loans Only For Development Not Operating Expenses Says Minister

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Finance minister II Amir Hamzah Azizan says every loan is made for the purpose of developing the country's future.
Finance minister II Amir Hamzah Azizan said the fiscal deficit rate has consistently decreased every year from 6.4% in 2021 to 4.1% in 2024, and is projected to further decrease to 3.5% in 2026. (Bernama pic)PETALING JAYA: Loans disbursed by the government have never been used to cover current operating expenses of projects, says finance minister II Amir Hamzah Azizan
He emphasised that rather, every loan is made for the purpose of developing the country’s future, Bernama reported.
Amir said Malaysia has recorded continuous deficit spending since 1998, with the government having to finance the fiscal deficit every year through loans to cover national development spending.
“We need to accept the reality that the sharp increase in the national debt level began in 2020, when the previous government had to take out additional loans to finance the stimulus package and economic recovery to protect the people and support businesses affected by Covid-19.
“As a result, the federal government’s debt increased from RM793 billion or 52.4% of gross domestic product (GDP) in 2019 to RM1.079 trillion or 60.2% of GDP at the end of 2022. This is an increase of RM286.6 billion in three years,” he was quoted as saying when winding-up the debate on the 2026 supply bill (2026 budget) policy stage in the Dewan Rakyat today.
According to Amir, the fiscal deficit rate has consistently decreased every year from 6.4% in 2021 to 4.1% in 2024, and is projected to further decrease to 3.5% in 2026.
“Along with that, the total new government borrowing has also decreased to around RM77 billion in 2025 compared with RM100 billion in 2021 and 2022, while the debt growth rate is projected to decrease to around 6% in 2025,” he said.
He added that the government always ensures the debt level is below the statutory limit of 65% of GDP as set under the Loans (Local) Act 1959 and the Government Financing Act 1983, while offshore loans of RM22.8 billion are also still below the maximum allowed level of RM35 billion.
The Parliament sitting continues tomorrow. - FMT

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