Audit Report: Federal Govt’s financial performance improves in 2023, achieves surplus and decrease in deficit

Audit Report: Federal Govt’s financial performance improves in 2023, achieves surplus and decrease in deficit

KUALA LUMPUR: The federal government recorded better financial performance in 2023 compared to 2022, with a surplus increase of RM2.028 billion and a deficit reduction of RM8.595 billion.

This brought the country’s deficit-to-gross domestic product (GDP) ratio down to 5.0% in 2023 from 5.5% in 2022, according to the Auditor-General’s Report 3/2023 on the Federal Government’s Financial Statements for 2023, presented in the Dewan Rakyat today.

“The deficit balance of the Development Fund amounted to RM10.217 billion, showing a reduction of RM1.734 billion (14.5%) compared to RM11.951 billion in 2022.

“However, the federal government needs to pay attention to the trend of increasing federal liabilities, which consist of federal debt and financial liabilities, rising by RM92.038 billion (6.6%) to RM1.492 trillion compared to RM1.400 trillion in 2022,” stated the report.

Additionally, the Auditor-General’s report revealed that the government’s guarantee commitments to 13 companies increased by 1.5% year-on-year to RM3.288 billion in 2023, compared to RM224.116 billion in 2022.

Meanwhile, the dividends received by the federal government showed a significant decline of RM9.756 billion (17.5%) compared to RM55.815 billion in the previous year.

Regarding the management of federal liabilities, the report indicated an upward trend, with the federal liabilities-to-GDP ratio increasing to 81.8% compared to 78.0% in 2022.

The federal debt-to-GDP ratio in 2023 was at 64.3%, also up from 60.2% in 2022.

The statutory debt-to-GDP ratio was 62.1% in 2023 compared to 57.5% in 2022, according to the report.

“The National Audit Department (JAN) noted the initiatives implemented by the government to ensure prudent management of federal debt, especially through fiscal reforms with the approval of the Public Finance and Fiscal Responsibility Act 2023 [Act 850] in Parliament on Oct 11, 2023.

“The federal government has also taken steps to rationalise and consolidate the deficit gradually, with a projected fiscal deficit of 4.3% of GDP in 2024,” it stated.

To improve the financial performance of the federal government, the Auditor General recommended several points for consideration.

These include advising the federal government to continue efforts to increase revenue from various sources and to enhance governance in public expenditure management to ensure a stronger financial position.

The federal government should also ensure prudent public debt management to reduce reliance on new loans, according to the report.

Author:

Leave a Reply

Your email address will not be published. Required fields are marked *