00:00According to an economist, Malaysia's elevated national debt does not pose a threat to the country's prosperity as its strong fundamentals enable the government to service the debt.
00:12University Malaya senior economics lecturer Go Lim Tai said the national debt, which stood at RM1.22 trillion and 63% of gross domestic product as of April 2024, warrants careful management but is not inherently a threat to future prosperity.
00:30He said in assessing debt sustainability, economists focus less on the absolute size of the debt and more on the country's ability to service it over time without compromising growth or triggering financial instability.
00:44In Malaysia's case, he said, the country still enjoys substantial fiscal capacity, a diversified economic base, and continued access to domestic and international capital markets.
00:55He added that more importantly, international institutions continue to signal confidence in Malaysia's fundamentals.
01:04Go said all three major credit rating agencies, Standard & Poor's, Moody's, and Fitch Ratings, reaffirmed Malaysia's investment grade ratings in 2024, signaling to global investors that the country's fiscal position is being managed prudently and that reforms are progressing steadily.
01:20The government's fiscal reform initiatives have also been given a positive assessment by the International Monetary Fund, with the IMF welcoming the government's commitment to fiscal consolidation and the historic enactment of the Public Finance and Fiscal Responsibility Act.
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