Govt misses fiscal deficit target
By Elorm Desewu The government’s fiscal deficit has widened further, recording an end year deficit of 9.7 percent o Gross Domestic Product, (GDP), slightly higher than the target of 9.4 percent of GDP for 2021. Total revenue and grants for 2021 was 15.4 percent of GDP. Domestic and tax revenue also recorded 15.2 percent and 12.6 percent of GDP respectively. Total expenditure was 25.1 percent of GDP for 2021. Capital expenditure was 3.5 percent at the end of 2021. The net domestic financing was 5.4 percent of GDP. For the 12months period of 2021, the primary balance was in deficit of 2 percent of GDP. The 2021 and medium-term fiscal policy framework was based on Government’s broad macroeconomic objective of restoring and sustaining macroeconomic stability with a focus on fiscal consolidation and debt sustainability over the medium-term. This objective was to be accomplished through deepening of structural reforms to support socio-economic transformation, especially through the implementation of reforms to increase revenue mobilisation and ensure efficiency and effectiveness of public finances. The 2021 Mid-Year Fiscal Policy Review of the 2021 Budget revised the fiscal deficit target to 9.4 percent of GDP down from the 9.5 percent set in the 2021 Budget. Similarly, the primary balance target was revised to -2.0 percent of GDP from -1.3 percent. This was on the back of revisions in GDP projections, adjustment in interest payments, and in the allocation for compensation of employees to reflect the 2021 negotiated public sector wage adjustments.