As 2025 kicked off, one number had many Malaysians doing a double take: RM1.63 trillion.

That’s the total household debt in Malaysia at the end of 2024, according to the Ministry of Finance (MoF). It’s a huge figure, and understandably, it raised a few eyebrows (and blood pressure levels!).

But before we panic, MoF also shared some comforting news—Malaysia’s total household financial assets are doing much better, clocking in at RM3.4 trillion. That’s 178.2% of our GDP, which suggests there’s a solid buffer in place.

Debt is Growing, But So Are Financial Assets

Let’s break it down. Yes, household debt rose from RM1.53 trillion in 2023 to RM1.63 trillion in 2024. Most of this came from housing loans, which still make up more than 60% of household borrowing, along with car loans and personal credit.

But here’s the positive spin: even with that increase, the debt-to-GDP ratio actually dropped from 84.2% in 2023 to around 82% in 2024. That’s because the economy is expected to grow steadily at 4.5–5.5% in 2025. In other words, our financial health isn’t in critical condition just yet.

What’s Driving All This Debt?

For many Malaysians, it boils down to one goal: owning a home.

With property prices rising by 4.1% between 2022 and 2023 and continuing their upward trend, it's no surprise people are borrowing more. In fact, property transactions in Q1 of 2024 alone hit RM56.53 billion—a 34.3% increase year-on-year.

Cars are another major factor. Over 70% of Proton and Perodua buyers opt for 9-year loans, showing just how stretched household budgets really are.

And with the rise of buy-now-pay-later apps and fintech credit services, taking on debt has never been easier—or more tempting.

Not Just Debt—Malaysians Have Assets, Too

Now for the silver lining. Household financial assets also saw growth, hitting RM2.4 trillion in 2024 compared to RM2.23 trillion in 2016.

One major pillar of this is the Employees Provident Fund (EPF), which still delivers over 5% annual dividends. But concerns remain—especially after the i-Sinar and i-Citra withdrawals during the pandemic. Many accounts are still trying to recover.

Beyond EPF, savvy investors are eyeing the stock market. For example, Telekom Malaysia rewarded shareholders with an 18.5 sen dividend last year. And in the digital age, there’s growing interest in cryptocurrency—more than 840,000 Malaysians have joined digital asset exchanges since 2021.

Digital Finance on the Rise

Malaysia isn’t just watching the crypto wave—it’s riding it. The Securities Commission is actively pushing to make the country a blockchain hub, and regulated platforms are multiplying fast.

While crypto isn’t legal tender in Malaysia just yet, assets like Bitcoin and Ethereum are increasingly seen as a hedge against inflation—especially with 2025’s inflation rate at 2.4%, up from 1.8% in 2024.

Traditional safe havens like gold are also proving their worth, rising from RM133 per gram in 2009 to RM245 today.

Trouble on the Horizon?

Still, not everything is rosy. Rising debt, stagnant wages, and higher living costs—3% hike in food prices, pricier utilities—are making it harder for Malaysians to stay afloat.

Most worrying is the bankruptcy rate among young adults. Recent research shows that 73% of Malaysians aged 18–40 are already in debt.

While the government is tightening lending rules and offering support for repayment, the MoF’s latest update steered clear of these challenges, focusing instead on the positives.

So What’s the Takeaway?

For everyday Malaysians, 2025 is the year to rethink your financial game plan.

Yes, debt is a reality—but so are opportunities to build wealth. A smart mix of EPF savings, unit trusts, stock investments, and even digital assets could help build a more balanced financial future.

It’s not about choosing between the old and the new. It’s about using both—from tried-and-tested savings to blockchain breakthroughs. The key is to diversify wisely and stay grounded, even while exploring new opportunities.

In short, Malaysians are navigating a tightrope—juggling debt, chasing dreams, and adapting to a fast-changing financial world.

As long as we stay informed and invest smartly, there’s hope that the future looks a lot brighter than the debt headlines suggest.