Malaysia’s debt servicing bill soars

KUALA LUMPUR: Malaysia’s debt servicing costs are projected to reach RM61bil in 2027, exceeding the Health Ministry’s RM47.7bil allocation and the RM40bil earmarked for fuel subsidies.

Despite lower annual borrowings, federal government debt has risen to RM1.38 trillion as of June 2026.

While the debt-to-GDP ratio has improved to 63.1%, rising debt servicing costs could further constrain the government’s fiscal space for healthcare, education and development spending.