Fiscal Deficit Exceeds Budget

For the fiscal year to November, Central Government recorded a fiscal deficit of $48.27Bn which exceeded the budgeted amount by $2.07Bn. The primary surplus was $31.30Bn or $6.11Bn less than budgeted.

 

The performance of the primary balance is of concern as it is increasingly likely that the government will have to increase taxes in order to get to its targeted figure of 7.3% by fiscal year 2014/2015.

The outturn of the fiscal balance for the period reflected lower revenues and grants which amounted to $210.66Bn and represents a $10.317Bn shortfall. Revenues from International Trade underperformed as income from Custom Duty, GCT on Imports and SCT on Imports all recorded shortfalls.

Receipts classified as Income and Profit also fell below target primarily due to lower PAYE receipts. It is not expected that receipts from PAYE will improve in the upcoming months given the trajectory for higher unemployment levels On the other hand, income from Production and Consumption were bolstered by receipts from SCT and Stamp Duty (Local) as both line items were above budget by $705.5Mn and 489.7Mn, respectively.