Davies THE GOVERNMENT has overshot its budget by $30 billion, according to new figures released yesterday, but savings and aid appropriations have cut the net overruns to just under $17.5 billion.
The First Revised Estimates of Expenditure for 2003/04, tabled in the House yesterday by Finance Minister Dr. Omar Davies, show that Government has spent $279 billion to run the country, as opposed to the $262 billion approved at the start of the fiscal year last April.
The revised estimates did not indicate an effective date for the figures, which come just weeks ahead of the close of the fiscal year, at the end of this month.
Government mainly over-reached its recurrent expenses, which overshot its target by $14 billion to $176 billion, while capital expenses amounted to $102 billion, representing a negative variance of $3 billion.
The heaviest overreach on the recurrent side was for debt servicing costs, which were $11.5 billion over target, indicating that the Ministry of Finance's expectations, that interest rates would have trended down sufficiently to fall in line with the 19 per cent rate on which the budget was constructed, were unrealised.
Last March, the central bank pushed interest rates to just under 36 per cent as part of a strategy to control liquidity in the system. The rates were recently coaxed back down to 18.5 per cent.
The Finance Ministry has paid out over $90 billion in interest payments, according to the estimates. Education, which was voted the largest slice of the budget after debt financing, also came in at $6 billion over its recurrent budget.
In contrast, the Finance Ministry shaved $6 billion off its approved operational expenses, spending only $3.7 billion of its allotted $9.8 billion.
The fiscal deficit, which slipped to $36.5 billion as of January a fractional increase over the December out turn of just under $36 billion is compounded by the heavier debt servicing needs, and lower than expected tax revenue intakes.
To make up the shortfall, Government has been borrowing both locally and internationally, pushing the national debt to new levels of $672 billion at the end of December.
The Standing Finance Committee will meet on March 9 to consider the tabled estimates.
