Malaysia Debt to Rise 10 percent this year

The Malaysian government’s debt is expected to increase 10.1 percent this year to 502.4 billion ringgit (164 billion U.S. dollars) on account of higher domestic borrowings to meet funding requirements, the finance ministry said in its annual economic report on Friday.

External debt, denominated in U.S. dollars and yen, remains manageable at 1.9 percent of the Gross Domestic Product (GDP) or 269.5 billion ringgit this year compared with last year’s 257.3 billion ringgit, according to the 2012/2013 economic report.

Debt-to-GDP ratio for this year would stand at 53.7 percent, which is said to be sustainable although it is approaching the 55 percent limit that the government had set.

Malaysia’s GDP is projected to grow between 4.5 percent and 5.5 percent in 2013, from 4.5 percent to 5 percent this year, driven by private investments and domestic consumption. Last year’s GDP grew 5.1 percent.

The fiscal deficit to GDP ratio is expected to decline to 4.5 percent in 2012 and further to 4 percent in 2013 at nearly 40 billion ringgit, while the government aimed to reduce the figure to 3 percent by 2015.

Total Federal government expenditure is estimated to be at 252. 4 billion ringgit in 2012, or 10.2 percent higher than in 2011.

The higher expenditure, the government explained, was due to additional allocations for one-off cash transfers, book vouchers and financial incentives to ease rising cost of living, subsidies and salary adjustments.

via Xinhua

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza