PARLIAMENT The Finance Ministry has confirmed that the government’s contingent liability, which is acquired by acting as guarantors to loans taken by statutory bodies and government-linked companies, is not included in the government’s debt.

Deputy Finance Minister Ahmad Maslan said this to the Dewan Rakyat today after revealing that the government’s debt to the Gross Domestic Product (GDP) has risen slightly to 53.6 percent as of September, compared to 53 percent of the GDP back in June.

“Government guarantees are not a form of debt. The government only needs to pay the debt if the loanee is unable to pay back,” Ahmad Maslan said in response to a question from Wong Tien Fatt (DAP-Sandakan) about the latest figures of the government debt.

He also said that contingent liabilities cannot be included in the debt because it would appear to “underestimate” the ability of the statutory bodies to repay the loans.

Meanwhile,  he also said that the government debt is currently at RM529.6 billion, but described the situation as being under control.

This is a slight increase from the RM 519 billion which was recorded at the end of June, also in a written answer given in Parliament.

The government has a self-imposed debt to GDP ratio ceiling of 55 percent.