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Reopen economy instead, think tank says on raising debt limit

PETALING JAYA: A think tank has called on the government to implement several measures, including expediting the reopening of the economy, following a proposal to raise the current debt limit.

The Center for Market Education (CME) said increasing the debt limit risks several “negative unintended consequences“ generated by additional borrowing.

This includes additional debt transferred to future generations, not only in terms of money but also a weaker currency and fewer job opportunities, its chief executive officer Carmelo Ferlito said.

It would also further worsen Malaysia’s credibility and investors’ confidence as well as limit private investments.

Additional demand for loanable funds, he warned, could push up the interest rate and discourage private investments and limit growth and job creation.

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