PRIME Minister Najib Razak today insisted that the country’s economy was heading in the right direction, and dismissed recent reports cautioning against the country’s soaring interest on its debts.

In a live question-and-answer online session today, Najib said the country was not headed for bankruptcy, but was instead enjoying a high credit rating of “A”, as opposed to most of our other Southeast Asian neighbours rated “B”, with the exception of Singapore.

“If you want to say that our country is bankrupt – logically speaking, it would be Category B countries who would be bankrupt first. Not A. It doesn’t make sense,” said Najib, who is also finance minister.

Najib was referring to the credit rating showing long-term foreign currency credit ratings as reported by three major credit rating agencies, Standard & Poor’s, Fitch and Moody’s.

Standard & Poor’s credit rating for Malaysia stands at A- with a stable outlook. Moody’s credit rating in 2016 was A3 with a stable outlook. Fitch’s credit rating was last reported at A- with a stable outlook.

Najib also said that Malaysia had recorded a low rate of unemployment and inflation, and had been praised by international organisations such as the World Trade Organisation for its positive economic growth.

“The economy, Alhamdulillah. It’s in good hands,” he said.

“If at 5.9% in terms of achievements, Alhamdulillah, that’s one of the highest in the world, ladies and gentlemen. Coupled with low inflation and low unemployment. That’s the big picture.”

Najib had earlier announced that Malaysia’s economic growth in the fourth quarter of last year reached 5.9%, placing the country’s economic growth as one of the highest in the world.

However, despite the feel-good numbers, economists have warned that Malaysia’s rising debt have imposed a huge financial burden on the country’s economy in the form of high interest on repayments.

Economists say Malaysia’s single-A-rated status, which means it has to borrow at higher rates compared with countries like Singapore, which are triple-A rated, will pose a further challenge to the government in lowering its debt interest payments in the future.

Recent media reports revealed that, going by an annual growth rate of 10.7%, Malaysia’s debt could reach RM1 trillion by 2021 on excessive spending.

By the same projection, Malaysia’s debt could reach RM2 trillion in 2028 and RM3 trillion in 2032. – February 22, 2018.