Rating agencies had earlier this year flagged Malaysia’s growing interest payment as a challenge for the fallen Najib Razak government.
However, this fact was buried by the local media controlled by the regime.
What they kept saying to the unsuspected population were the agencies positive sentiments towards Malaysia, though many disagreed with these ‘sentiments’.
Yesterday, the ex-PM Najib lambasted Finance Minister Lim Guan Eng in a Facebook posting that drew the ire of netizens in Malaysia.
The ex-Finance Minister expressed his views over the current government’s assertion that the actual debt that Malaysia has to service amounted to RM 1 trillion, instead of RMRM685.1 billion as claimed by Najib.
While Najib got a point on the specificity of the debt ratio to the GDP (50.8%), Lim and Prime Minister Mahathir were right in saying the debt servicing would be higher than the Najib regime’s claims.
Indeed, the Pakatan Harapan government was somewhat riotous in their announcement of the RM1 trillion debt.
Najib used the seemingly negative result of their brazen statements on the economy as fodder to explain the ever-falling stock market or Bursa Malaysia.
The local stock fell by some 28 points on Thursday – its third straight downward trend – but only to recover by a good +21.74 points or 1.22% on Friday.
The upward and downward trend of the local bourse showed the limited understanding of the mechanism of the stock market by the ex-FM, or by his ‘ghost’ writer.
Under Najib Razak, the stock market used to be the joke in business newsrooms. When it was down, we used to say it was because of the negative sentiments against Najib on the 1MDB scandal.
Yet when it went up, the joke was that Najib’s government was pumping money in the stocks to give them a life.
Nevertheless, Najib said last year that Malaysia’s debt is at a manageable level.
But critics showed concerns over how much interest is being paid to service that debt, said the Straits Times in a February article.
With the Pakatan Harapan’s killing-off of the unpopular Goods and Services Tax, the debt service ratio has ballooned, but Mahathir said he has a solution for this.
Najib’s administration had planned to eliminate the country’s narrowing budget deficit by 2020 but has now deferred the target date to 2023, ostensibly due to low oil prices.
Mahathir’s government has may have a better luck with the rising oil – or rather stable oil prices – which is at US$80 or a three-year high it attained on May 17. Brent Crude Oil is currently at US$78, which is far higher than it was when Najib presented his 2018 Budget.