KUALA LUMPUR (July 29): The Federal Government's fiscal deficit has continued to shrink for five consecutive years, demonstrating the government's commitment to an economic and fiscal reform plan that has yielded results, said Deputy Finance Minister Liew Chin Tong.

He said the federal government's fiscal deficit continued to show a declining trend at 3.7% of gross domestic product (GDP) in 2025, compared with 4.1% in 2024, 5.0% in 2023, 5.5% in 2022 and 6.4% in 2021.

He said that in line with fiscal consolidation efforts, the government's new borrowing also decreased from RM100 billion in 2021 and 2022, to RM92.6 billion in 2023, and further to RM77 billion in 2024 and RM75.6 billion last year.

He also said that as a result of the implementation of a more prudent fiscal policy, the growth rate of the federal government's debt has shown a consistent downward trend.

"The government's debt decreased to 5.9% in 2025 from 6.4% in 2024, 8.6% in 2023, 10.2% in 2022 and 11.4% in 2021.

"The government remains committed to ensuring that the debt growth rate continues to be at a lower level for 2026 compared to previous years," he said during the question-and-answer session in the Dewan Negara on Wednesday.

He was responding to a question from Senator Datuk Leong Ngah Ngah regarding the government's steps to strengthen the fiscal position, considering that the debt ratio is now approaching 60% of GDP.

Liew noted that by the end of March 2026, the government debt ratio stood at 63.1% of GDP, lower than 65.2% at the end of 2025.

He said the reporting of the ratio is based on the current year's GDP, and this method is also used for reporting previous years.

"In this regard, the government remains disciplined and adheres to all the statutory debt limits that have been set," he said.

He said statutory debt, which includes Malaysian Government Securities (MGS), Malaysian Government Investment Issues (MGII), and Malaysian Islamic Treasury Bills (MITB), at the end of 2025 stood at 63.9% and was 61.9% of GDP at the end of March 2026, which is still below the 65% threshold.

Meanwhile, offshore loans amounting to RM20.8 billion, well below the ceiling of RM35 billion, and Malaysian Treasury Bills amounting to RM4.5 billion, remain below the RM10 billion limit, he added.

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