KUALA LUMPUR (June 13): AmBank Group Research expects the potential credit line to be used for economic development and support small and medium-scale industries with the aim of ensuring continuous growth while “cleaning up the red files”. 

In a note today, AmBank group chief economist and head of research Dr Anthony Dass said this after Malaysia had asked Japan for yen-denominated loans to pare down its hefty debt load of RM1.09 trillion or 80.3% of gross domestic product (GDP).

“At the same time, Kuala Lumpur is also seeking Tokyo’s assistance to improve existing railroads to increase the frequency of freight and passenger trains running on underused tracks and stations with the aim of reducing traffic and enhance rail transport.

“The high-speed rail (HSR) system will only be considered in the future due to the high costs,” he said.

Dass said Malaysia has been seeking financial aid from the Japanese government since the First Malaysia Plan, and would have been exposed to a total of more than US$2.8 billion.

“We expect the potential credit line to be used for economic development and support small and medium-scale industries with the aim of ensuring continuous growth while “cleaning up the red files”. 

“We expect the loans to be on a special rate of around 1% or even lower, depending on the type of projects, over a long-term period of 30–40 years,” he said.