Ipoh: The government's priority in the 2013 Budget as well as its long-term plan is to substantially reduce the country's debt-to-gross domestic product (GDP) ratio. With debt at 53 per cent of the country's GDP, the government is looking at ways to reduce this ratio without affecting Malaysia's development expenditure.
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said managing the country's finances prudently would continue to be the underlying policy of the government. Speaking to reporters here yesterday, he said although the maximum allowable ratio of debt-to-GDP was 55 per cent, the government would seriously attempt to reduce the ratio, beginning next year. Ahmad Husni said the reduction of debt would have to be carried out properly without affecting the nation's development. "The government will strive to achieve a proper balance in its fiscal budget with the aim of ensuring continuity in the development of the country.
"We have eight more golden years before we reach our target of being a developed country by 2020. "Striking fiscal balance while reducing debt is not easy but the government is committed to bringing down our debt level," he said after opening the new Mydin hypermarket in Gugusan Manjoi here. Asked if the government was confident of reducing the country's debt-to-GDP ratio, Ahmad Husni said this also depended on external economic factors such as the global economic and financial situation. "The government is committed and it hopes to be able to reduce the ratio to below 50 per cent.
Of course, our efforts depend on our ability to generate higher revenue." He said reducing the debt-to-GDP ratio was among three areas that the government was focusing on in ensuring a resilient expansion of the economy, robust development and stronger government finances. The other two were better operating surplus and reduced deficit. Ahmad Husni said the government's focus was also fixed on reducing deficit gradually, adding that it intended to reduce deficit to 4.7 per cent this year and 3.5 per cent by 2015.