KUALA LUMPUR (Oct 18): The federal government's debt service charges (DSC) are expected to reach RM54.7 billion in 2025, a 7.7% rise from RM50.8 billion projected in 2024, according to the Ministry of Finance's (MOF) Fiscal Outlook and Federal Government Revenue Estimates report.

The DSC of RM50.8 billion is equivalent to 15.8% of the federal government's total operating expenditure (Opex) in 2024 — the third biggest expenditure after emoluments (RM99.76 billion, 31%) and retirement changes (RM34.44 billion, 10.7%).

This is the second consecutive year that the amount has exceeded RM50 billion. This is also the second time that DSC takes up 16% share of the federal government's Opex since 2010. 

The MOF said the increase in DSC is mainly due to the borrowing during the Covid-19 pandemic and the government's strategy to shift from short-term to long-term instruments to improve the debt maturity profile.

The country's DSC has been on the upward trend, in line with the national debts. The sum was at RM20.8 billion in 2013, it then shot up by roughly RM10 billion, or 50%, to RM30.5 billion in 2018.

Click here to read more about the Economic Report 2024/2025.