Najib: Why no mention of RM1 trillion debt by global agencies?

(FMT) – Former prime minister Najib Razak has once again cast doubt on Pakatan Harapan’s (PH) assertion that the country’s national debt amounted to RM1 trillion.

Najib said he had read the latest reports from three different ratings agencies – Moody’s, Standard & Poor’s and Fitch Ratings – and none of them mentioned that amount.

“The latest report from Bank Negara Malaysia (BNM) also stated that our national debt as at June was RM725 billion, an increase from RM686 billion from the end of 2017. That is also not RM1 trillion.

“I have also read the World Bank Report last week and neither did they mention that Malaysia’s debt was at RM1 trillion,” he said in a Facebook post today.

However, Najib said the World Bank had revised downwards Malaysia’s economic growth, and even though the matter was widely reported in foreign media, local media did not give it much coverage.

The Pekan MP said an international trade report released for August showed export had reduced while import was increasing.

He said this resulted in a big trade surplus drop, the biggest in the last 45 months.

“The report also confirmed that the export of palm oil had dropped about 27%, compared to my projected fall of 26%,” he said.

The former finance minister said he had made this projection two months ago, when he expressed concern over a drastic drop in international trade surplus between May and June to RM6 billion, which was half of the RM13 billion surplus in April.

This was a result of a drastic rise in imports and a drop in exports.

Najib had said that this could be attributed to the zero-rating of the goods and services tax (GST), which caused consumers to buy imported goods.

He also pointed out that he had, in an interview, said Malaysia could possibly face a multiple-deficit situation.

Aside from an increase in local consumption, Najib had said the imports were quickly increasing, as compared to exports, since GST was zero-rated.

“As a result, our trade surplus has dropped. This, coupled with an increase in outflow of capital since the general election, has resulted in the surplus of the current account to drop very badly, to US$1 billion from what used to be US$15 billion in the last quarter.

“I warned of a multiple-deficit situation if the PH government continues to allow that surplus to become a deficit, and if domestic demands and imports continue to increase in a deteriorating export growth situation, we could potentially face a trade deficit, which would mean a triple deficit.”

Najib said it appears his worries are slowly becoming a reality, and hopes the PH government will always take note of the possibility of a triple trade deficit.