Capital FM
Business

Treasury November accounts reveal K85.7bn deficit

By George Lumwira

The Treasury has recorded a deficit of K85.7 billion for November 2020.

This is according to the Reserve Bank of Malawi-RBM’s monthly economic review released recently.

Revenues dropped by 26%, while expenditures increased by 35.4%.

The report indicates that the expenditure increase was mainly triggered by recurrent expenses including the agricultural Affordable Input Program-AIP.

Central government budgetary operations for the month of November 2020 recorded a 26.4 % decrease in revenue collection, while expenditures increased by 35.4 %.

Therefore, the outturn for the month resulted into an overall deficit of 1.3 % of the gross domestic product-GDP.

The overall deficit for the preceding month and the corresponding months of 2019 amounted to 0.1 % of GDP and 0.4 % of GDP, respectively.

Revenue collection for the month of November 2020 totaled K93.7 billion, which was a 26.4 % decline from K127.3 billion that was collected in the previous month.

The outcome during the month under review was as a result of a decrease in both domestic revenue collection and foreign receipts.

Domestic revenues declined by 17.3 % to K83.6 billion, while foreign receipts declined by 61.6 % to K10.1 billion.

In the domestic revenue collection category, tax revenue collections recorded a 19 % decline to K78.4 billion, while non-tax revenues recorded an increase of 21.3 % to K5.2 billion.

Total expenditures for the central government recorded an increase of 35.4 percent to K179.4 billion in the month under review.

The upturn in expenditures was attributed to an increase in recurrent expenses by 41.5 % to K164 billion, mainly due to expenses towards the Affordable Input Program.

READ  Ombudsman to probe Form 1 selection criteria

On the other hand, interest payments recorded a decrease of 60.6% to K10.1 billion, while development expenditures declined by 7.3 % to K15.4 billion.

In an earlier interview with Capital FM, the Institute of Chartered Accountants in Malawi-ICAM’s Chief Executive Officer Francis Chinjoka Gondwe advised the government to minimize expenses and find ways of broadening the tax base if it is to achieve its budgetary obligations.

During the month of November, the private sector credit growth continued to recover, registering an annual growth of 20.1 % from 16.9 % in the preceding month and 15.4 % in the corresponding month in 2019.

Related posts

Economists differ on fiscal calendar change

Gomani Christy

Milk Producers Association to enter Northern region market

Clement Msiska

RBM warns against get-rich-quick schemes

Catherine Tinto

Leave a Comment

error: Content is protected !!