PM: 1MDB debt not fully settled, new borrowing based on need

Prime Minister Anwar Ibrahim has denied claims that 1MDB’s debt has been fully paid off.

Astro Awani reported him as saying that the debt, together with its accrued interest, had yet to be fully settled.

“Some have said that all of 1MDB’s debt has been paid off.

“I don’t know which book they read that in, but that is not true. Our debt, together with its interest, still has to be paid,” he reportedly said at the Finance Ministry’s monthly assembly in Putrajaya today.

On July 9, Deputy Finance Minister Liew Chin Tong told Parliament that the federal government had paid RM42.5 billion towards 1MDB-related debts and commitments as of June 30, but still faced RM8.9 billion in outstanding government-guaranteed sukuk due to mature in 2039.

According to Free Malaysia Today, the RM42.5 billion already paid covered principal repayments, interest, legal and operational costs, as well as other commitments.

Separately, Liew (above) said the government had recovered RM31.3 billion in funds linked to 1MDB, but was still expected to bear an estimated RM20.1 billion in net liabilities after accounting for those recoveries.

He also noted that the scandal’s impact extended beyond the financial losses, undermining the country’s reputation and credibility.

'National debt ratio to dip'

In his speech, Anwar stressed that the government would only take on new debt when necessary and when it has the capacity to repay it.

He also projected a slight dip in the national debt ratio, from 64 percent this year to 63.7 percent in 2027, which he said reflected the government’s commitment to maintaining long-term fiscal sustainability.

“This has indeed become controversial, with some views suggesting that the overall amount of debt has increased. That is true, because old debts have to be repaid.

“A responsible government only borrows according to what is needed to manage the economy.

“At the same time, however, it always plans for the future. We should not burden future generations with excessive spending by the present generation,” he stressed.