DEWAN Rakyat has approved the government’s plan to raise its debt ceiling for the second time in as many years.

At 5.30pm, the 220-member Dewan Rakyat passed the bill to allow the government to borrow up to 65% of the gross domestic product (GDP) as part of the temporary measures legislation to mitigate the effects of the Covid-19 epidemic.

Prior to this, Malaysia raised its debt ceiling to 60% last year. The ceiling was also raised in July 2009 during the global financial crisis.

According to Finance Minister Tengku Zafrul Aziz, the measure is a temporary one and the limit will be revised down to 60% when the bill expires on December 31, 2022.

In line with raising the debt ceiling, the House today amended the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 by increasing the fund by RM45 billion to RM110 billion.

“Though temporary, the government may propose the bill again if necessary,” said Tengku Zafrul during the debate in the Dewan Rakyat today.

The bill allows the government to fund RM45 billion of additional spending on economic and stimulus aid packages.

“This will ensure continued support to all parties, particularly the B40 group and the affected families so that they can receive assistance to lighten their load,” Tengku Zafrul said. 

The bill also aims to strengthen the public health systems and support small- and medium-sized businesses, he added.  

According to Tengku Zafrul, the government is still committed to consolidating the final deficit of less than 3.%. – October 11, 2021.