Wednesday, 17 July 2013

5 Facts That You Might Not Know About Our Central Government Debt

I know I've been posting lots about our country's debt problem. Well guess what? Here's more...

5 Facts That You Might Not Know About Our Central Government Debt

1. As of March 2013, our Country's debt is at a whopping RM508.892 billion! Comparing the debt figure to the Petronas Net Profit for 2012 of RM59.1 billion, it takes about 8.61 years worth of oil drilling just to pay off the debt.

2. From 1st Quarter of 2007 till 1st Quarter of 2013 (6 years), this is how our country's debt graph look like:

I wish my salary rise was that exorbitant!

3. For the 1st Quarter of 2007, our Country's debt is at RM250.006 billion. Within the span of 6 years our debt has risen by an additional RM258.886 billion! That's a +103.55% increase!

4. Out of the RM508.892 billion worth of debt, about 96.82% or RM492.750 billion of it consist of Domestic Debts. These are debts from loans taken up by the Government from banking systems and private debt securities. Now where do banks obtain money from? Think about it.

5. Looking from an investment point of view. If I have RM250,006 billion to invest and would like to reach RM508.892 billion within 6 years, my annual investment returns via compounding interest would have to be approximately 12.58%!

Data obtained from Bank Negara Malaysia (BNM). Click HERE to verify.

Cheers and Happy Investing!

Related Post:
1. How Does GST, Subsidy Cuts, Credit Rating affects us as Malaysian?
2. Indonesia's Inflation Crisis...Malaysians should learn from it!

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1 comment:

  1. The graph trend looks like my debt trend when I first came out to work. Though mine was in thousands and theirs are in millions. The only significance factor for consideration is that I was fresh from university but the Gov is a veteran, having been in power since independence. Sadly, they still not yet learn the basic of "personal financing". Well, in this context, it should be national financing.

    Anyway, the figures may not be exactly correct if we factor in all the guarantor roles that the government has undertaken. Should the borrowers default, the Gov got to bear the loan then. How bout Gov bond? Can we take that as debt as well?

    To be fair in this discussion, sometime debt is necessary for the development of the country. Ever heard of leverage? It's just like you go to banks and get loans for your hire purchase and mortgage. Why you borrowed them at the first place? The simple reason is you need a mode of transportation to earn wages and a house to stay and for protection. However, if you get the loans for sole luxury purpose, and you can't afford it, that would be over leveraging. That's where the problem really started.

    Think about it. Is our government borrowing for the development of the country or over leveraging for political agenda which I relate it as "luxury" in this sense? I'll leave that to you for own pondering.

    Thanks Shane for sharing the stats.