Fitch unit: Putrajaya’s debt could rise to 70pc of GDP by GE15

[superadmin]

Fitch unit: Putrajaya’s debt could rise to 70pc of GDP by GE15 as elections upend fiscal reduction target

KUALA LUMPUR, Nov 10 — Political volatility could derail Putrajaya’s bid to reduce its debt pile as the ruling parties would likely overshoot its spending target to avoid electoral backlash from a public still reeling from the Covid-19 Pandemic, Fitch Solutions said today.

Government expenditures have already surpassed budget projections for two consecutive years since the beginning of the pandemic.

In 2020, revenue underperformed while expenditure increased as a result of the measures taken to combat the pandemic leading to the actual deficit coming in at RM87.6 billion or 6.2 per cent of GDP compared to a projected RM34.5 billion or 2.5 per cent of GDP.

The Fitch Group unit projected the government’s fiscal deficit to be 6.3 per cent of its GDP in 2022, which is slightly wider than the government’s projection of 6.0 per cent.

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