Malaysia Flag National Debt

Malaysia National Debt Clock: Who Holds Their Debt and Why Is There a Limit?



RM. 827,669,597,980


Note, this figure excludes newly found government guarantees of RM 199 billion and PPP lease payments of RM 201 billion


Source: Malaysian Government Data. This is Central Government Debt, but the data is now questionable.

Last Updated: September 16, 2021

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Interest Payments Per Year
$6,495,834,000
Interest Payments Per Second
$206
National Debt Per Citizen
$6,026
Debt as % of GDP
57.07%
GDP Of Malaysia
$338,945,310,720
Malaysia Population
32,100,000

In this guide to Malaysia’s National Debt, we discuss the amount of the debt, who manages it, the country’s credit limit, and who buys its debt.

The National Debt Of Malaysia

Malaysia’s national debt is the sum of all money owed by the central government of Malaysia through the issue of debt instruments.

Obligations that are not represented by bonds or bills, such as pension obligations are not included in the national debt figure and neither are the debts accumulated by the states of Malaysia.

Malaysia Skyline
Malaysia Skyline (public domain)

What’s Included in Malaysia’s Debt Number?

The table below explains what is included in the national debt figure and what isn’t:

Malaysian Government ObligationGovernment DepartmentIncluded in National Debt?
Government-issued bondsMinistry of Finance
Short-term debt instrumentsMinistry of Finance
National bank guarantee schemeMinistry of Finance
National pension obligationsEmployees Provident Fund
Civil Service pension obligationsAll
Accounts payable (unpaid bills)All
State government debt

National Pension Obligations

The compulsory national pension scheme of Malaysia is called the Employees Provident Fund. It is managed by the Ministry of Finance, but for accounting purposes, it is regarded as an independent entity and its assets and liabilities are not included on the nation’s balance sheet.

Government Guarantees to Private Companies

The government’s guarantees to private companies became a major political issue in Malaysia in 2018.

These guarantees were previously not counted as part of the national debt, but they are becoming an issue because default on the guaranteed loans will pass the repayment obligation to the government.

Who Manages Malaysia’s National Debt?

The central bank, Bank Negara Malaysia, states that the government, the central bank itself, and other agencies of public service have the right to raise debt through issuing bonds and notes.

All of the debt raised by the government is the responsibility of the Treasury Department of the Ministry of Finance and is included as part of the national debt.

Currency Exchange

Bank Negara Malaysia is responsible for the country’s money supply and so it would only usually raise debt to support the currency on the exchange markets. This debt does not count as part of the national debt.

Public-Private Partnerships

The debt raised by government agencies is usually made in the form of public-private partnerships or leasing agreements. This debt is controversial in Malaysia.

What Is Malaysia’s Debt Limit?

Malaysia has a debt limit imposed by parliamentary law, expressed as a percentage of GDP. The level of the limit was raised in August 2020 to 60% of its GDP.

Problems With the Debt Limit

There are two problems with this limit: it’s self-imposed and it’s couched as public debt.

Dangers of a Self-Imposed Debt Limit

The first problem is that the debt limit was created by the government itself. Since a political party can only form a government in Malaysia if it has a majority in parliament, the limit could easily be adjusted or abolished at will.

Framing the Debt as “Public Debt”

A second problem with the debt limit is that it is framed in terms of “public debt.” Thus, the government can argue that they should be allowed to spend all the way up to the 60% limit on its own.

However, others insist that “public debt” should include all debt owed by the public sector, including Malaysian state governments and any public-sector government agencies.

Former Malaysian Prime Minister Tun Dr Mahathir Mohamad addressing the UN General Assembly in 2003
Former Malaysian Prime Minister Tun Dr. Mahathir Mohamad addressing the UN General Assembly in 2003 by Syrenn (public domain)

Who Buys Malaysian Government Debt?

The Malaysian government only allows registered principal dealers to buy primary issues of government bonds directly from the Treasury.

However, these dealers act as market makers and either resell those bonds onto the secondary market or organize buyers for their tranche before they bid for it.

Major Buyers of Malaysian Government Bonds

According to Bank Negara Malaysia, the major buyers of Malaysian government bonds in order of activity are:

  1. The Employees Provident Fund (EPF)
  2. Pension funds
  3. Unit trusts
  4. Insurance companies
  5. Asset management companies
  6. Discount houses
  7. Commercial banks

Other Buyers

Domestic institutions hold the majority of Malaysia’s government debt but overseas investors hold a small portion as well.

More Facts About Malaysia’s Debt

  • You could wrap $1 bills around the Earth 753 times with the debt amount.

  • If you lay $1 bills on top of each other they would make a pile 21,127 km, or 13,128 miles high.

  • That's equivalent to 0.05 trips to the Moon.

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