RECENT positive reports from the World Bank and the International Monetary Fund (IMF) have confirmed Malaysia’s fiscal position as previously reported by the government, said Finance Minister Lim Guan Eng.
Malaysia is making progress in its reforms, leading to sustained economic growth, subdued inflation and a current account surplus, Lim said.
The government’s debt and liabilities relative to gross domestic product (GDP) as at end-June 2019 were 52.6% for direct debt, 10.4% for committed government guarantees and 2.1% for 1Malaysia Development Bhd (1MDB), the Debt Management Committee said on December 6.
“Overall, the government’s debt and liabilities have decreased from 79.3% of GDP at end-2017 to 77.1% as at end-June 2019.
“This shows the success and commitment of Pakatan Harapan in its debt and liabilities consolidation efforts,” Lim said in a statement today.
In the medium term, the government targets to lower its total debt and liabilities to 65% of GDP by the end of 2025, he said, adding that the fiscal deficit target for 2019 of RM52 billion or 3.4% of GDP will be achieved, as reported by the World Bank and IMF.
“This represents a reduction from the fiscal deficit of 3.7% of GDP in 2018, owing to the government’s successful implementation of open tenders and cost saving measures.
“Direct debt is expected to increase by RM52 billion in 2019 to fund development expenditure, which was approved by the Parliament in 2018.”
Aside from direct debt, Lim said the government’s liabilities also include committed government guarantees to implement public transportation and utilities projects, including mega-infrastructure projects, such as Light Rail Transit Line 3, Mass Rapid Transit 2 and Pan Borneo Highway with a total cost exceeding RM75 billion.
In addition, Lim said committed government guarantees have also increased after taking over entities such as Tabung Haji.
Meanwhile, the international credit rating agencies’ affirmation of Malaysia’s sovereign credit rating at A- or A3 with stable outlook is strong evidence that PH is prudent and transparent in the fiscal management of the government, Lim added. – Bernama
Azmin defends PNB despite low dividend for ASB
KUALA LUMPUR, Dec 20 — Minister of Economic Affairs Datuk Seri Mohamed Azmin Ali today defended Permodalan Nasional Bhd (PNB), which has been criticised after announcing the lowest Amanah Saham Bumiputera (ASB) dividend payout since it was launched in 1990.
Mohamed Azmin said PNB had done its best to ensure both depositors and shareholders would get their returns despite the weaker economic climate.
Mohamed Azmin said that the government would ensure that PNB is governed strictly, with integrity and accountability.
“We want to make sure that PNB is governed with transparency and accountability, but PNB will explain that. It involves over RM9 billion and it is not a small amount of money,” he added.
On Wednesday, PNB announced a distribution of 5.5 sen per unit for ASB unitholders, comprising a five sen distribution and a 0.5 sen bonus for the year ending December 31, 2019.
The income distribution for the year is lower than last year’s total distribution of seven sen per unit.
The total payout for income distribution will be RM9 billion, benefitting 10 million unitholders who own 167.2 billion units, bringing the fund’s total cumulative income distribution and bonus to RM152 billion since its inception in 1990.
Meanwhile, Mohamed Azmin said more discussions were needed to find a strategic partner for the beleaguered Malaysia Airlines Bhd as the government had received several proposals from regional and international players.
“We just had our board meeting on December 17 and this matter was discussed, but the proposal which was presented during the board meeting was not attractive enough for us to decide.
“So the prime minister, the chairman and the board agreed that we should look at other options before making the final decision,” he added.