Finance Ministry: We will be able to regenerate economy after Covid-19 is settled

KUALA LUMPUR (Aug 12): The Ministry of Finance said it is confident that Malaysia will be able to regenerate its economy after the Covid-19 crisis settles down, highlighting the country’s sovereign ratings which are “still at high levels”.

Deputy Finance Minister Datuk Abdul Rahim Bakri (pictured) said the A- ratings by Fitch, S&P and Moody’s reflect their confidence in Malaysia’s ability to support its economy via the PRIHATIN and PENJANA stimulus packages.

He said this in response to a question from Alice Lau Kiong Yieng (PH-Lanang), who asked about the nation’s fiscal position and the downgrades by the ratings agencies.

Abdul Rahim said Malaysia has a total of RM823.8 billion in debt, or 53.6% of gross domestic product (GDP), although he also pointed out that the government has other commitments as well.

This includes guarantees for infrastructure projects such as Light Rail Transit (LRT) and Mass Rapid Transit (MRT) projects totalling RM166.9 billion, as well as 1Malaysia Development Bhd (1MDB)’s debts amounting to RM32.6 billion.

There are also other liabilities totalling RM181.4 billion, which include commitments related to public-private partnership (PPP) projects, Pembinaan PFI Sdn Bhd and PBLT Sdn Bhd.

“For example, the projects include PFI’s development of Putrajaya which we are still paying for and PBLT’s works related to the police quarters nationwide, which is funded by EPF (Employees Provident Fund), and other maintenance projects for hospitals and roads.

“In total, the nation’s debt and other exposure stands at RM1.264 trillion. We are looking at this in detail for the upcoming Budget 2021,” he said in Parliament today.

Meanwhile, he said the total revenue for 2020 was projected at RM244.5 billion, although he pointed out that this was based on the crude oil price assumption of US$62 per barrel.

“However, given the Covid-19 crisis and the volatility of commodity prices, the figure is expected to be lower,” said Abdul Rahim.

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