The government inherited more than RM1 trillion in national debt, with Anwar citing RM13 billion in 1MDB bonds as part of its ongoing financial obligations.
KUALA LUMPUR: The government continues to shoulder financial obligations inherited from previous administrations, including RM13 billion in bonds issued by 1Malaysia Development Berhad (1MDB), Prime Minister Datuk Seri Anwar Ibrahim said.
Anwar, who is also Finance Minister, dismissed claims that the government was accumulating fresh debt simply to finance its day-to-day expenditure.
He explained that national debt naturally increases when the government runs a budget deficit and relies on borrowing to bridge the shortfall.
Debt accumulation is a continuous process, he said, as new borrowings are added to the outstanding balance from previous years.
Anwar also pointed out that the administration inherited national debt exceeding RM1 trillion, with a significant increase recorded between 2020 and 2022 due to the financial demands arising from the COVID-19 pandemic.
“New borrowing under this administration is intended to finance national development, including schools, hospitals, roads, as well as water and electricity supply.
“We are also compelled to meet inherited financial obligations. In 2023 alone, RM13 billion was required to settle 1MDB bonds,” he said during Prime Minister’s Question Time in the Dewan Rakyat today.
He was responding to Lee Chuan How (PH-Ipoh Timor), who sought clarification on why the country’s debt had yet to be reduced to a more sustainable level.
Lee also asked whether the government’s current fiscal position provided sufficient flexibility to introduce economic measures to safeguard the country’s economy and public well-being should the conflict in West Asia escalate further.
