Wednesday, October 17, 2012

Government-guaranteed loans breached RM100b mark

The Auditor-General's Report 2011 has revealed that the accumulated federal government-guaranteed loans climbed by RM19.85 billion or 20.5 percent in 2011, breaking the RM100 billion mark for the first time to hit RM116.76 billion. The figure has doubled in four years and experienced a rapid rise since 2008. The hike from 2008 to 2011 was a whopping 69 percent or RM47.52 billion.

The Malaysian Government-guaranteed loans are loans taken by statutory bodies and companies but guaranteed by the federal government under the Loan Guarantee (Bodies Corporate) Act 1965. These loans are separate from the federal government debt and are not reflected in the annual budget, and are often described as part of the country's "hidden debt".

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According to the audit report, the federal government debt in 2011 hit RM456.12 billion, or 51.8 percent of the gross domestic product (GDP), a few percentage below the legislated debt ceiling of 55 percent.

If the RM116.76 billion of government guaranteed loans are included into the federal debt, the total debt would be RM573 billion or 65 percent of the GDP, which is way beyond the debt ceiling.

Isn’t this a scary situation for the country to be in? I am now biting my nails. My skin erupts in goose bumps. And acne is popping up all over my face.

I vex, I fret, I worry. God help us!

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