Governments' contingent liabilities increase fiscal vulnerability, but are omitted in traditional measures of the current deficit. In the Czech Republic this omission may mean that fiscal adjustment has been overstated by 3 to 4 percent of annual GDP, with future budgets having to pay for past...

Conventional fiscal analysis fails to address contingent fiscal risk. The government budget process and documentation generally fail to scrutinize the substantial claims on public resources that are associated with government contingent liabilities, realized and potential. This report fills gaps...