Govt seeks to contain borrowings, rebuild fiscal buffers
The focus will be on slowing the pace of borrowings in 2027 to keep rising government debt in check.
Federal government debt in Malaysia surged by RM58.1 billion to RM1.37 trillion by the end of June 2026, from RM1.32 trillion in 2025, according to the Ministry of Finance (MoF). The government aims to curb borrowing in 2027, focusing on containing debt accumulation and rebuilding fiscal buffers, prioritizing cost control and mitigating refinancing risks.
The MoF reported that the debt-to-GDP ratio dropped to 63.1% in 2026 from 65.2% in 2025, indicating faster economic growth compared to debt levels, and the government is nearing its target of holding debt below 60% of GDP. Net borrowings are expected to increase to RM78.6 billion by the end of 2026 from RM75.6 billion in 2025. The MoF prefers ringgit-denominated domestic issuances to mitigate exchange rate volatility, with resident investors holding 78.5% of the outstanding federal debt, followed by the Employees Provident Fund (30.5%) and banking institutions (28.5%).
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 1 other outlet
- Govt seeks to contain borrowings, rebuild fiscal buffers freemalaysiatoday.com
