THE level of household debt in Malaysia is expected to remain manageable in 2018 and 2019, given the stable employment and income, said the Ministry of Finance (MoF).
“This is also supported by continuous measures taken by the government to raise awareness and educate households on financial planning and management,” said the MoF in its Economic Outlook 2019 report released yesterday.
It said the overall household debt valued at RM1.17 trillion and stood at 83.8 per cent of gross domestic product as at end-June 2018. The debt level has been moderating since 2015 following macro prudential measures implemented to rein in household debt level, it said.
“The bulk of debt comprises loans for purchase of residential properties (53 per cent), followed by personal use (14.4 per cent) and passenger cars (13.8 per cent),” it revealed.
Meanwhile, total household financial assets remain strong at RM2.46 trillion, said the MoF.
On banking system performance, the MoF said the banking system was expected to remain sound, operating with strong capital and liquidity buffers.
During the first seven months of 2018, activities in the banking system remain resilient with all financing indicators expanding. Loan applications, approvals and disbursements increased by 5.7 per cent, 5.1 per cent and 7.3 per cent to RM505 billion, RM223.1 billion and RM678.8 billion, respectively, said the MoF.
Total loan outstanding expanded by 5.3 per cent to RM1.63 trillion as at end-July 2018.
Lending to businesses recorded a stable growth with loan applications rebounded by 7.4 per cent to RM227.8 billion, while approvals increased 3.3 per cent to RM100.5 billion. – Bernama
