KUALA LUMPUR, Aug 5 — The Madani government is gradually lowering the fiscal deficit in phases to reduce national debt, said Prime Minister Datuk Seri Anwar Ibrahim.
He said if the deficit were suddenly reduced, it could hinder additional funding for education activities, Rahmah Cash Aid (STR), and healthcare.
Anwar said the fiscal deficit was recorded at 5.5 per cent of gross domestic product in 2022. This was gradually lowered to 5 per cent in 2023 and reduced to 4.1 per cent in 2024.
“Our target is to reduce the deficit gradually in phases. As long as the deficit is not reduced, the debt amount will increase.
“That is why, from the debt perspective, I said in 2021 that the new debt amounted to RM100 billion; in 2022, RM99 billion and in 2023, the new debt amount fell to RM92.6 billion. In 2024, it will further be decreased to RM76.8 billion,” he said during the ministerial question time in the Dewan Rakyat today.
Anwar said last year, STR and Rahmah Basic Aid (Sara) allocations rose to RM15 billion, and the Education Ministry received the highest increase to RM64 billion, while the Health Ministry received a RM45 billion rise.
He said the policy has been viewed positively following a rise in foreign and domestic investor confidence.
“Therefore, it is not true to say that the ringgit is depreciating. Our ringgit is the strongest currency in Asia currently. It was at its worst at RM 4.70 to the dollar. It is now RM4.24,” he said.
He was responding to Datuk Iskandar Dzulkarnain Abdul Khalid’s (PN-Kuala Kangsar) question about whether the Madani government is managing national debt responsibly given that it rose from RM1.079 trillion in 2022 to RM1.247 trillion in 2024, which is almost 65 per cent of the GDP.
“The increase, which is up to 65 per cent of the GDP, is development spending. We do not owe (in terms of) operating expenses. We owe, although less, debt for development expenditure,” said Anwar.
