(Aug 6): Spending in excess of revenue every year since 1998, Malaysia has racked up over RM1 trillion in debt in just 25 years. The figure could double by 2030 if revenue growth continues to trail the rate at which overhead expenses are growing spending.
And not only is Malaysia among the majority of countries that had little choice but to accumulate more debt to save lives and livelihoods during the Covid-19 pandemic, official data shows that the country has been rolling over its debt.
Already at 18% of federal government revenue, interest payments alone will become more expensive as new debt are taken at higher rates to roll over old debt.
While Malaysia is in no immediate danger of defaulting on its loan obligations and becoming the next Sri Lanka, the fact that interest rates are rising at their fastest pace in two decades in most of the developed world means that debt will become more expensive to service. This racks up pressure for greater revenue generation capabilities and higher spending efficiencies.
To know what all that means for Malaysians and the country’s development, read our cover story this week by picking up a copy at news stands.