The government's debt does not threaten the economic position of the country, instead the country's economic performance is envied by many countries, Datuk Seri Najib Tun Razak said.

The prime minister said the national debt stood at 53 percent (of the gross domestic product), which was much less than that of other countries.

Najib, who is also finance minister, said the debt did not threaten the economic position of the country and this was attested by many countries.

"In a meeting with Dutch Prime Minister Mark Rutte yesterday, he (Rutte) acknowledged that Malaysia's economy is much better than that of the Netherlands.

"If I may quote Rutte, 'I envy your economic performance'," he said in reply to a supplementary question from Datuk Dr. Tan Seng Giaw (DAP-Kepong) at the Dewan Rakyat here today.

On household debt, Najib said it was at 80 percent unlike that of the US which had led to the sub-prime crisis.

"A large portion of household debt was due to housing loans. This means that the loans are supported by strong asset backing and the value of the assets will continue to rise," he said.

However, he said the government would monitor the household debt to ensure that it would not rise too high and could still be managed to increase the income of the people.

To a supplementary question from Datuk Mansor Othman (PKR-Nibong Tebal), Najib said Malaysia adopted free and open economic principles based on market growth and the performance was encouraging.

In the first six months of this year, he said Malaysia's economic growth rate was the best among Asean countries and one of the highest in the world.

"But if we were to look at the income gap between races, rural and urban dwellings, it is getting better. Just ethnicity is not improving. We accept there are challenges, but our approach is to give focus and assistance to the lowest 40 percent of the income bracket (B40)," he said.

Najib said government's continuous efforts would bring about long-term effects, and if the government were to introduce the Capital Gains Tax as proposed by the opposition, it would give a negative impact to the economy.

To the original question by Datuk Wira Ahmad Hamzah (BN-Jasin), the prime minister said effective measures in driving the New Economic Model had managed to reduce income disparity among the people.

He said this was indicated by a reduction in the Gini coefficient (a measure of statistical dispersion) from 0.441 in 2009 to 0.431 in 2012, and based on preliminary data from the Income and Expenditure Survey (IES), the Gini coefficient was further reduced to 0.421 this year.

Najib said income disparity between urban and rural households was also reduced proportionally from 0.423 in 2009 to 0.410 in 2014 in urban areas and from 0.407 to 0.307 in rural areas during the period under review.