MOF Lodges Reports Against False News Claiming Malaysia About To Bankrupt Like Sri Lanka

The Ministry of Finance has taken to task on several reports on social media which have painted a misleading picture on the country's financial and debt situation, MOF stated that country's fiscal position is still strong and the Federal Government's debt is under control.

In a statetement published on its official web page, the Ministry emphasised that important aspects of debt management are debt affordability and debt sustainability. In this regard, it said the Federal Government's debt is clearly still under control based on the following certain factors. 

Not denying of the country having gone through a series of economic and financial recession crises before, it said the Government is highly disciplined and has never failed to pay interest and mature debts which proves Malaysia's reputation and capability as a debtor with a good repayment record.

The Ministry further added that under Article 98 (1) (b) of the Federal Constitution it stipulates that the Government must always prioritize debt charges over other operating expenses. The External Borrowing Act 1963 provides that offshore borrowings cannot exceed RM35 billion. As at end -June 2022, this debt amounted to RM29.4 billion.

The Provisional Measures for Government Financing (Coronavirus Disease 2019 (COVID-19)) (Amendment) Act 2021 stipulates that the statutory limit of Government debt cannot exceed 65% of GDP. At the end of June 2022, statutory debt accounted for 60.4% of GDP.

In addition, 97% of the total debt of the Federal Government is in Ringgit denomination. This reflects prudent debt management as exposure to foreign exchange risk is minimal.

High debt levels do not mean the country is at risk of bankruptcy. Various international rating agencies such as S&P Global, Fitch and Moody’s constantly assess a country’s debt level along with other factors such as a prudent fiscal framework, sound governance and good external position, as well as economic strength.

MOF further claimed, the International Monetary Fund had acknowledged that Malaysia's debt position is still at a manageable level and even S&P expects that the Government's policy planning will support the strengthening of the country's fiscal position.

Based on the facts, MOF refutes the allegations and has called on these social media platforms of being irresponsible and malicious who had stated that Malaysia is about to go bankrupt like a country in South Asia refering to Sri Lanka. The Ministry said it had lodged an official complaint with the Malaysian Communications and Multimedia Commission (MCMC) on these reports. 
Previous articlePTT Synergy Accepts LOA From Tropicana For RM53 Million Johor Project
Next articleStock Watch: MyEG Share Price May Stage A Technical Rebound

LEAVE A REPLY

Please enter your comment!
Please enter your name here