Second, there is increasing evidence that public contingent liabilities are on the rise in emerging market economies and in many cases already account for several
percentage points of GDP. Contingent liabilities are, by definition, difficult to track. Only a few countries follow basic reporting practices or conduct regular monitoring
of fiscal risks stemming from them. In China, contingent liabilities amount to more than 14 percent of GDP, and they are also substantial in other countries, including India, Malaysia, and South Africa. Sources of contingent liabilities vary and include off-budget local government borrowing in China, bank recapitalization needs and liabilities of the electricity distribution companies in India, and public enterprise borrowing in
South Africa (Figure 1.3, panel 4). In Bulgaria, banking
sector support could increase government debt.
Second, there is increasing evidence that public contingent liabilities are on the rise in emerging market economies and in many cases already account for several
percentage points of GDP. Contingent liabilities are, by definition, difficult to track. Only a few countries follow basic reporting practices or conduct regular monitoring
of fiscal risks stemming from them. In China, contingent liabilities amount to more than 14 percent of GDP, and they are also substantial in other countries, including India, Malaysia, and South Africa. Sources of contingent liabilities vary and include off-budget local government borrowing in China, bank recapitalization needs and liabilities of the electricity distribution companies in India, and public enterprise borrowing in
South Africa (Figure 1.3, panel 4). In Bulgaria, banking
sector support could increase government debt.
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