Kuala lumpur: The MADANI government is gradually reducing the fiscal deficit in phases to lessen the national debt burden, said Prime Minister Datuk Seri Anwar Ibrahim. He emphasized that a sudden reduction in the deficit could risk hindering additional allocations for educational activities, the Sumbangan Tunai Rahmah (STR) assistance, and health.

According to BERNAMA News Agency, Anwar stated that the fiscal deficit was recorded at 5.5 percent of the gross domestic product (GDP) in 2022. This was gradually reduced to five percent in 2023 and is projected to decrease further to 4.1 percent in 2024. Anwar highlighted that the strategy is to reduce the deficit gradually in phases to prevent an increase in the debt amount. He noted that the new debt amount fell from RM100 billion in 2021 to RM99 billion in 2022, and further to RM92.6 billion in 2023, with a target of RM76.8 billion in 2024.

Anwar also mentioned that in the previous year, STR and SARA rose to RM15 billion, while the Education Ministry received a significant increase of up to RM64 billion, and the Health Ministry received a RM45 billion rise. This policy has reportedly been viewed positively, resulting in increased foreign and domestic investor confidence. Anwar refuted claims that the ringgit is depreciating, asserting that it is currently the strongest currency in Asia, improving from its worst at RM4.70 to the dollar to RM4.24.

In response to a query from Datuk Iskandar Dzulkarnain Abdul Khalid (PN-Kuala Kangsar) regarding the responsible management of the national debt, Anwar clarified that the increase in debt, which reached almost 65 percent of GDP by the end of 2024, is attributed to development spending rather than operating expenses. He emphasized that the debt is primarily for development expenditure.