2015 Budget (5) – A Critique
by Economic Observer
19th October 2014
In his speech, the Prime Minister studiously avoided any reference to the size of the public debt which now requires an allocation of RM 23.2 billion or almost 11 percent of the Budget to service the accumulated debt of the Federal Government now estimated to amount to RM 568.9 billion accounting for 52.8 percent of GDP, a level marginally below the established ceiling.
These numbers exclude the contingent liabilities of the Federal Government and other off budget borrowings.
Nor did the Prime Minister mention the level of debt carried by households, now in excess of 85 percent of GDP.
What is wholly inexcusable is the failure on his part to refer to the bombshell dropped in the Treasury’s Economic Report concerning the size of the nation’s external debt.
The Economic Report discloses that Malaysia’s external debt totals RM 729 billion, equivalent to 67.6 percent of GDP. This compares with a debt level of RM 335.6 billion or 31.1 percent of GDP before the revision.
This more than doubling of the external debt cannot be swept under the carpet. It is shameless in the manner in which the Prime Minister dealt with the issue. Continue reading “2015 Budget (5) -The Debt Bombshell: New Revelations”