According to the Auditor-General’s Report, 2024 borrowings also decreased by RM39.26 billion or 16.3% compared with RM241.51 billion in 2023.
It said the federal government’s revenue rose by RM9.66 billion, or 3.1%, to RM324.62 billion against RM314.96 billion in 2023.
However, revenue surplus declined by RM0.58 billion, or 15.8%, compared with RM3.69 billion in 2023.
“Additionally, the development fund’s deficit balance increased by RM0.32 billion, or 3.1%, compared with 2023’s deficit balance of RM10.21 billion.
“The ratio of federal liabilities to GDP decreased from 81.8% to 81.7% in 2024,” Bernama quoted the report as stating.
The report urged the federal government to pay attention to the rise in federal liabilities amounting to RM86.05 billion (5.8%), which includes an increase in federal debt by RM75.11 billion compared to 2023.
It recommended that the finance ministry strengthen its revenue collection mechanism, particularly with respect to direct tax revenue, to ensure that surplus revenue can be utilised to fund development expenditure and reduce the fiscal deficit and reliance on new borrowings.
It also noted a need for more effective measures to collect outstanding receivables and avoid write-offs that could result in federal government losses.
“The finance ministry is also advised to consistently monitor and evaluate federal government-owned companies’ financial management to ensure their viability and to provide appropriate dividend returns to the federal government,” it said.
Meanwhile, the federal debt growth rate showed a declining trend to 6.4% in 2024 compared with 11.4% in 2021.
“Principal loan repayments due in 2024 declined by RM17.84 billion (12.7%) to RM122.34 billion against RM140.18 billion in 2023, due to a lower level of maturing loans,” the report said.
However, national debt servicing expenditure in 2024 rose by RM4.15 billion (9.0%) to RM50.48 billion, compared with RM46.33 billion in 2023, to cover interest payments on the remaining RM1.25 trillion federal debt as of Dec 31, 2024.
The report recommended that the federal government ensure prudent debt management to reduce the risk exposure of a federal debt default.
“Fiscal consolidation measures must be continued to ensure that new borrowings remain lower than during the pandemic period, without hindering the country’s economic growth.
“Subsequently, the debt level should not exceed 60% of GDP in the medium term, as stipulated under Act 850,” it said.
It also advised the federal government to monitor new borrowings used to repay maturing loans, considering that the government will need to allocate funds to settle RM490.02 billion in maturing loans over the next five years.