THE Ministerial Economic Sector Committee this week conducted an assessment of the 2025 budget, focusing on measures for continued budget repair and fiscal responsibility.
The Treasurer, Hon. Ian Ling-Stuckey, stated that the Marape-Rosso Government was committed to navigate the complex terrain of economic pressures while maintaining fiscal prudence.
“The Marape-Rosso Government continues the important work of budget repair. This is hard work filled with difficult decisions,” Ling-Stuckey said in a statement.
“There are massive pressures to increase expenditures to meet pressing development needs and equally compelling calls to reduce taxes. At the same time, we must keep repairing the budget so we can return to a budget surplus and start paying down our debt.This is a delicate balancing process but one that we must get right for our people, and for the next generation.”
According to the Treasurer, the government has seen positive results from its fiscal management efforts, with the budget deficit expected to drop from 8.9% of GDP in 2020 to 3.2% of GDP by the end of 2024. Growth in tax revenue and a steadying inflation forecast were underscored in the recently published Mid-Year Economic and Fiscal Outlook (MYEFO), now available on the Treasury website.
He said in the first half of 2024, the government recorded expenditures of K10,904.1 million, which represents 39.8% of the total budget estimate.
He added that revenue collections during the same period reached K8,981.5 million, covering 38.4% of the budget and resulting in a deficit financing of K1,922.6 million.
Revenue growth, achieved without new taxes, reflects a strong economic performance, with a notable 15.8% increase over the previous year. Notably, non-resource tax revenues are forecast to rise by 9.7% from 2023 levels, a figure driven by economic growth rather than tax hikes.
However, expenditure pressures remain. The government’s commitments to critical sectors, including education and healthcare, are set to surpass initial budgetary allocations.
“There are expenditure pressures of K600 million from payments to our teachers and workers, which are tracking higher than expected,” the Treasurer noted.
“This is welcome news, as we should respect these vital service delivery functions through higher wages and increased staffing. At the same time, we must find cost savings elsewhere to ensure budget repair stays on track.”
