It would also raise RM52 billion worth of net direct debt for development expenditure this year, as planned in Budget 2019, he added in a statement.
“The planned RM52 billion fiscal deficit will translate into 3.4% of 2019 GDP.
“The government is on track to meet the 3.4% target, which is lower than the 3.7% of GDP fiscal deficit or RM53 billion recorded in 2018.
“The funds raised are entirely allocated for the purposes of development expenditure such as roads and infrastructure for the public.”
Lim said allegations that the net direct debt raised of RM58 billion as at Sept 26, had already exceeded the budgeted RM52 billion for the full year were baseless and false.
He said the RM58 billion figure failed to take into consideration two key factors.
”First and most importantly, the government issues and redeems its debt and securities regularly each year based on its yearly debt issuance and redemption schedule.
“For the whole year, the government plans to raise RM135.7 billion worth of gross direct debt while redeeming RM83.3 billion in return.
“Specifically, RM38.8 billion has been redeemed in the January-August 2019 period and another RM44.5 billion will be redeemed in the September-December 2019 period.
“Hence, looking merely at the current net direct debt figure without taking into consideration the planned redemption of debt and securities for the remainder of the year would give a grossly inaccurate picture of the country’s debt levels.
“It deliberately distorts the picture by looking at the monthly picture instead of the entire year, as the annual budget is done on a yearly and not monthly basis.
“Secondly, issuance and redemption of debt necessarily fluctuate throughout the year in order to regularise the cash flow of the government.
“The issuance of debt will always be proportionally higher in the first half of the year because the revenue collection for the government is always lower in the same period.
“Correspondingly, the redemption of debt will always be higher in the second half of the year because the government will collect higher revenues during this period.”
This, he said, had been the customary financial practice of the government even in the past and that anyone claiming otherwise was being dishonest.
“Bear in mind that revenue collected will also be used to pay off our existing debts and liabilities, such as the 1MDB debt.
“The Pakatan Harapan government is committed towards fiscal consolidation to rein in the excessive debts chalked up by the previous regime.
“The government is on track to meeting its goals and targets set for 2019.”