The government has revised the country’s overall fiscal deficit target in 2022 to 6.6% of Gross Domestic Product (GDP), from the earlier 7.4%.
This is due to cuts in expenditure and expected improvement in revenue for the rest of the year.
Again, the government has revised the primary surplus target to 0.4% of GDP, up from a surplus of 0.1% of GDP.
Government in March 2022 announced the implementation of the 30% discretionary expenditure cuts and other expenditure measures.
Some expenditure measures were the moratorium on foreign travels except pre-approved critical and/or statutory travels, and a 50% cut in fuel coupon allocations for all political appointees and heads of government institutions, including State Owned Enterprises, effective April 1st, 2022.
The government also recently approved a 15% Cost of Living Allowance (COLA) for all public servants.
Accordingly, total Revenue and Grants have now been revised to ¢96.84 billion (16.4% of GDP) in 2022, from the 2022 Budget target of ¢100.51 billion (20.0% of GDP).
This represented a 3.7% reduction.
Total Expenditure including payments for the clearance of arrears has also been revised downward to ¢135.74 billion (22.9% of GDP), from the original budget projection of ¢137.52 billion (27.4% of GDP).
Interest Payments have however been revised upwards from ¢37.44 billion (7.5% of GDP) to ¢41.36 billion (7.0% of revised GDP).
This is mainly on account of inflationary pressures and exchange rate depreciation resulting in a higher cost of financing.