Speaking during Prime Minister’s Question Time in the Dewan Rakyat, Anwar said the government had already repaid RM42 billion, covering both principal and interest.
“The government’s biggest debt is still 1MDB, which we inherited in 2018. The total is RM34 billion, and if we include the RM17 billion in interest, the total comes close to RM50 billion,” he said in response to Syahredzan Johan (PH-Bangi).
“So far, the government has paid RM42 billion, including principal and interest. But thankfully, we have managed to recover RM29 billion through the efforts of the Attorney-General’s Chambers, the finance ministry and the Malaysian Anti-Corruption Commission.”
Syahredzan had asked the prime minister to state the current total national debt, explain the government’s principles in reducing new borrowings, and outline the debt repayment strategy to ensure that the country’s debt and fiscal deficit continue on a downward trajectory.
Anwar, who is also the finance minister, said the government’s fiscal management was guided by the Fiscal Responsibility Act, which sets a medium-term target of reducing the deficit to 3% and keeping the debt-to-GDP ratio below 60%.
“Our deficit has gone down from 5% in 2023 to 4.1% in 2024, and 3.8% in 2025,” he said.
“New borrowings have also dropped, from RM100 billion in 2021 to about RM75 billion now.”
As of September 2025, Malaysia’s total federal debt stood at RM1.3 trillion, or 64% of the GDP, which Anwar said was still below the statutory limit of 65%.
Malaysia’s external borrowings, at RM22.4 billion, also remained well under the RM35 billion threshold set by the Treasury, Anwar added.
Penang LRT expansion justified
Separately, Anwar said that the decision to extend the Penang LRT line across the sea to Seberang Perai was to ensure that the project benefits Malay-majority areas and neighbouring states such as Kedah and Perlis.
He was responding to Rosol Wahid (PN-Hulu Terengganu), who asked whether the Penang LRT project and Kota Madani smart city initiative were necessary given the country’s debt concerns.
Rosol said the cost of the Penang LRT had risen from RM10 billion in October 2023 to RM13 billion and later to RM17 billion, arguing that the same amount could be used to build 340 schools nationwide.
In response, Anwar said the cost increase reflected the government’s efforts to expand the line’s reach, and that part of the project’s funding came from bonds that would be repaid over time.
He added that the Penang LRT should be viewed in the same light as other major infrastructure projects such as the East Coast Rail Link (ECRL), which cost billions of ringgit.
“Why question the Penang LRT but not the ECRL and the benefits for states like Kelantan and Terengganu?
“It must be understood that the Penang LRT is not just development expenditure. Part of it is funded through bonds that will be repaid over time,” he said.
Anwar also said that the Kota Madani project in Putrajaya was not a “mega city” development, but aimed to provide housing for 10,000 civil servants.