Greece’s economic crisis will not impact the country — Najib

KUALA LUMPUR: The economic crisis affecting Greece will not adversely impact Malaysia as the country’s exports to it, was only 0.1 per cent of total exports last year, said Prime Minister Datuk Seri Najib Tun Razak.

Najib, who is also the Finance Minister, said Malaysia’s financial status remains strong as a
result of the government’s continued efforts in keeping debts at a manageable level.

“At the same time, the country has sufficient guidelines to ensure the debt level is stable and able to be serviced,” he told Lim Guan Eng (DAP-Bagan) in a written reply in the Dewan Rakyat here today.


Lim has asked the Prime Minister to state the effects of the Greece economic crisis as well as the precautionary steps being taken by the government in overcoming a similar situation.

Najib said the guidelines include a maximum domestic debt ratio of 55 per cent to gross domestic product (GDP)while the Federal government’s external debt is limited to RM35 billion.

He said in this regard, the guideline had helped minimise excess external and domestic debt risk.

“At present, 96 per cent of the country’s domestic debt is financed via local sources, thereby minimising the foreign exhange risk. As of May 31, Malaysia’s international reserves totalled RM312.3 billion (US$95.5 billion), sufficient to accommodate 4.4 times the external short-term debt of the country,” he added.

The Prime Minister said the government is always committed to ensuring any expenditure is prudent, of quality and efficient, including efforts to implement an open tender system while reducing spending that was not critical.

He said the government was also striving to introduce the Goods and Services Tax (GST) and improve tax administration to enhance revenue.

“With the continuing strong economic growth and prudent financial management as well as new initiatives under the Government Transformation Programme (GTP) and the ongoing Economic Transformation Programme, the financial position of the country is expected to improve further.

“With the prudent and pragmatic financial management of external debt, the government is confident that it will not undergo a debt crisis similar to that of Greece,” he explained.

According to Najib, the country has strong economic fundamentals as evident from the 10.1 per cent GDP growth in the first quarter of this year with all economic sectors posting positive growth.

“The strong and overall growth was spurred by domestic demand and supported by an improving external demand as well.

“At the same time, the country’s competitiveness has also improved significantly,” he highlighted. — Bernama