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Govt debt to reduce substantially in next few months – Dr Mahathir.

By June 29, 2018 No Comments

This reduction of debts should not be too difficult despite the removal of GST. Reasons:

1.The SST will kick in soon. The clamping of government leakages through corruption, unviable projects, and reduction in emoluments (just look at CEO salaries of GLCs) and other high operational expenditures should rake in savings by the billions!

2. Oil prices are expected to hover above USD 70 per barrel against the government bugeted figure of USD 50 per barrel. The high oil price is due to imminent sanctions on Iranian oil. US has warned all countries against buying Iranian oil or face the prospect of its sanctions. I forsee India being the only defiant country. Despite the high crude oil price, its unlikely for the shale oil production to dampen the crude oil price for a couple of reasons – I understand their pipelines (shale oil) are running at almost full capacities – and to invest in new pipelines or opening new drilling operations is unlikely – the prevailing higher interest rates in the US is prohibitive. So with higher oil prices and the consequential higher dividend payout by Petronas, there should be tens of additional billions in government coffers.

The new government is going to look good in its quest to reduce national debts.

By: Traj

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