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FISCAL OVERVIEW: The 2014-2015 has been developed within the context of continuing challenges faced in raising financing necessary to undertake the work programme of the government during the last fiscal year.
The challenges faced during the preceding year have made us more cognizant of the need to consolidate government’s fiscal position and strengthen public finances. It is for this reason that the 2014-2015 budget proposes a $75.4 million reduction from the 2013/14 approved estimates to $1,252,021,500.
However, the proposed budget represents an increase of $60.6 million over the preliminary outturn for the last fiscal year. While the budget estimates project a 5% expansion in total expenditure, central government revenue is projected to fall by 0.7% in 2014/2015.
Based on these developments, an overall deficit of $213.5 million is projected for the fiscal year 2014-2015. At $213.5 million, the overall deficit represents a 3% increase over the preliminary outturn for last year but as a percentage of GDP, the deficit remained in line with last year’s fiscal balance.
EXPENDITURE: With respect to recurrent expenditure, the government is proposing a 0.8% reduction from $947.9 million approved in 2013/14 to $925.8 million for the new fiscal year. It is important to note, however, that the recurrent expenditure budget for 2014/15 represents a reduction of just $7.7 million when compared with the provisional outturn for 2013/14.
The most significant reductions were made to Wages and Salaries and Transfer Payments categories while the allocation for debt service payments was increased by$17.1 million on account of higher interest payments and amortization of principal amounts projected for the fiscal year. The provision for principal was increased by $14.9 million from a preliminary outturn of $57 million while interest was increased by$ 2.2 million, an indication that only a small fraction of the financing for the 2013/14 budget was actual raised.
With respect to development expenditures, the government is proposing to allocate some $326.3 million to its capital program in the new fiscal year. The proposed capital budget represents a $54 million reduction from last year’s approved estimates. However, the proposed amount exceeds the 2013/2/14 outturn by $68.3 million or 26.4%.
The lower than expected performance reflects to some extent the challenges encountered in mobilizing resources to undertake the capital programme.