Chinese projects not expected to be derailed by Malaysian debt woes
Economists and analysts say that while some infrastructure investments are linked to ballooning debt, the government isn’t likely to pull the plug on them
Malaysia’s debt problems are unlikely to have any significant impact on Chinese investment in the country, according to analysts.
Many of the China-invested mega projects in the Southeast Asian nation are not linked to its national debt, they say, and Chinese projects do not make up a large portion of the liabilities – and the Malaysian government is not expected to terminate those that are part of the debt.
Controversy over the country’s mounting debt has been swirling this week, with new Prime Minister Mahathir Mohamad saying it had reached 1 trillion ringgit (US$251 billion). On Friday, the finance ministry provided a breakdown showing that federal government debt and liabilities amounted to 80.3 per cent of the nation’s gross domestic product.
Mahathir blamed the situation on the corruption of the previous Najib Razak administration, who, the new prime minister claims, abused the country’s finances for personal gain.
The debt woes have sent markets into a panic this week and left investors unnerved about the future of the Malaysian economy.