Malaysia’s household debt stands at about 84.3% of gross domestic product (GDP), a level considered appropriate for the country’s economic conditions, according to Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour.
Speaking at a press conference following the release of Malaysia’s second quarter 2025 (2Q25) GDP data, Rasheed said the central bank is closely monitoring the elevated debt level, noting that loans are being extended prudently and repaid on time. “From a stability perspective, these are good quality loans, and the total shareholder return has also improved,” he added.
Rasheed highlighted that banks have been careful in approving loans and have supported households with sound financing practices. The latest household impairment ratio stands at a healthy 1.1%, reflecting the resilience of borrowers, he said. BNM will continue to track household debt developments to maintain financial stability while ensuring that credit remains conducive to economic growth.
Deputy Finance Minister Lim Hui Ying noted in a recent Dewan Rakyat session that Malaysia’s household debt reached RM1.65 trillion as of March 2025. She added that the sector remains resilient, with household financial assets totalling RM3.45 trillion, or 2.1 times higher than the total debt.
The figures suggest that while household debt remains elevated, strong asset buffers and prudent lending practices have helped maintain overall financial stability.
