Off balance sheet refers to items that are effectively assets or liabilities but do not appear on the balance sheet.

Finance Minister Lim Guan Eng said Malaysia had accumulated RM1.087 trillion in debt and liabilities as at the end of 2017, a “substantial portion” of which comprised hidden debt and liabilities that the previous administration had “deceitfully kept under wraps or disguised as off-balance sheet items”.

He said this included the RM38.3 billion worth of 1MDB debt which the Barisan Nasional government was secretly servicing.

The other liabilities amounting to RM260.1 billion involved off balance sheet government expenditure masked as “Public Private Partnership (PPP)” or “Private Finance Initiatives (PFI)”.

“However, the financial cost, risks and obligations of these projects lie entirely with the federal government.

“Hence, the PPPs and PFIs were abused by the then BN government to give the false perception of low budget deficits, and a corresponding lower level of perceived debt,” he said in a statement.

Lim said, however, that the Pakatan Harappan government had significantly reduced the nation’s total debt and liabilities from 79.3% of the GDP as of Dec 31, 2017 to 75.4% a year later.