Friday, December 6, 2013

3Q2013 Government Debt Update

As outlined in the previous post, debt growth has slowed this year (log annual and quarterly changes):


Over the first three quarters of 2013, government debt increased 8.8%, compared to 9.5% during the same period last year. Average monthly net debt issuance for the year up to October is running 18.9% below last year’s at RM3.2b versus RM3.9b (RM millions):


The problem is that nominal income growth has been much slower this year as well (log annual changes):


That’s the main reason why, despite slowing growth in both outlays and debt accumulation, the debt to GDP ratio is continuing to climb (% nominal GDP):


The current ratio is within a hair of the 55% voluntary ceiling that the government wants to keep to – 54.987% to be precise. I don’t think the level will be breached as there is too much political capital tied into it, even if the limit is meaningless in economic and financial terms. It’s awfully close though.

Lastly, here’s the latest estimates for public debt per capita, based on DOS’ latest population estimates (RM):


Debt per capita has reached RM17,650 in current Ringgit, and RM13,252 in 2000 Ringgit. As in the overall debt picture, growth is slower this year than last year, although in this case it dipped sharply in 1Q2013 and has been accelerating over the last two quarters – about 7.2% (unadjusted) and 4.9% (inflation adjusted) for 3Q2013.

Technical Notes:

All data from the October 2013 Monthly Statistical Bulletin from Bank Negara Malaysia


  1. Dear hisham, thank you for a very informative blog. I have two questions:

    1. What was the reason for big jump in debt gdp ratio in 2009?

    2. Do you have a plot showing the debt gdp ratio since merdeka or at least for the past 20 yrs?

    Thank you very much for your insight.