KUALA LUMPUR (June 16): The Public Accounts Committee (PAC) said Malaysia's budget deficit and debt as a percentage of gross domestic product (GDP) was skewed due to off-budget expenses of a government-owned entity.

This was revealed in the PAC's findings on the Auditor-General's (AG) Report on Pembinaan PFI Sdn Bhd. The AG report was tabled in Parliament today.

"In PAC's opinion, this programme (Pembinaan PFI Sdn Bhd) serves to allow the government to make off-budget loans.

"The private quarters (firms) did not fund the costs of the projects," said PAC.

It was reported that the federal government’s debt stood at RM582 billion or 54.5% of GDP. This compared to the self-imposed 55% ceiling.

The country's fiscal deficit for 2015 was revised to 3.2% from the initial 3% announced in October last year.

Today, PAC said as Pembinaan PFI's loans did not show up as government liability, Malaysia's deficit rate and debt-GDP ratio were skewed.

PAC said loans under Pembinaan PFI's financial accounts were not indicated as government liabilities and that the expenditure was not taken into account when calculating the country's deficit.

As such, PAC said Pembinaan PFI's off-budget expenditure could create doubts over the figures produced in the national budget.