The Finance Ministry appears to have made two crucial mistakes in replying to a parliamentary question on external debt, making it seem that external debt
 <a href="http://www.malaysiakini.com/news/291641">
 
 tripled
 
 </a>
 between 2013 and 2014.


 It seemingly compared figures which were defined differently, and cited an entirely incorrect wrong figure for 2013.


 In its reply to PKR&rsquo;s Selayang MP William Leong yesterday, it said external debt at the end of 2013 was RM196 billion while external debt at the end of the third quarter of 2014 RM740 billion.


 This is a jump of 279 percent.


 However, in a statement today, the ministry said external debt at the end of 2013 is RM696.6 billion while at the end 2014, it is RM744.7 billion.


 This means external debt rose a relatively modestly by 6.9 percent.


 The figure given by the ministry in the statement matches Bank Negara Malaysia figures.


 "The federal government&rsquo;s debt levels continues to be manageable and Malaysia is categorised as a country with moderate debt," it said.


 Although the ministry does not say this, the discrepancy is likely explained by the fact that it had used different definitions for external debt.


 Definition for external debt was revised in 2014 to adopt International Monetary Fund (IMF)&rsquo;s standard. The new definition includes debt and bonds in ringgit held by foreigners.


 The parliamentary reply did not revise the 2013 figure according to the new definition as a base, resulting in seemingly the exorbitant jump.


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 Interestingly, the figure given in the parliamentary reply for 2013 is different to Bank Negara Malaysia figures, even if the definition is not revised.


 According to central bank, external debt at the end of 2013 is RM318.08 billion instead of RM196 billion as stated in the parliamentary reply.


 The parliamentary reply also showed the federal government&rsquo;s debt stood at RM582 billion, or 54.5 percent of the Gross Domestic Product (GDP), inching closer to the 55 percent self-imposed debt ceiling.


 Yesterday, Leong said the revised definition for external debt means highlights the dangers of borrowing made by local firms from foreign firms.


 This includes Finance Ministry-owned firm 1Malaysia Development Bhd (1MDB)&rsquo;s debt of RM42 billion, most of which is reportedly&nbsp; borrowed from foreign entities.


 "This is where firms such as 1MDB fall under, and this huge external debt represents such companies having debts with foreigners," he said.

The Finance Ministry corrects yesterday's parliamentary reply on external debt.

External debt didn’t triple, just up 6.9pct

~RM12

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