With Finance Minister Simplex Chithyola Banda set to face Parliament next month for the 2024-25 mid-year budget review, experts fear a possible rise in the expenditure plan from the initial K5.9 trillion.
The budget, presented on February 23, is said to have already gone off-track with most parameters it was premised on losing shape.
There have been disparities between revenue and expenditure over the first months of the financial year, forcing the government to spend beyond means.
In the first quarter of the financial year alone, for instance, the government budgetary operations recorded a deficit of K555.1 billion as expenditure far outweighed revenue.
In the period under review, total revenues amounted to K743.3 billion against expenditures of K1.3 trillion during the quarter.
Blantyre-based economist Marvin Banda said this financial year has been riddled by projections that have grossly from the baseline assumptions.
He gave an example that some government ministries, departments and agencies made budget arrangements based on inflation averaging 27 percent with Gross Domestic Product (GDP) growth rate of 3 percent.
“The next six months will see the budget adjusted upwards if shareholder expectations are to be met. Public debt will continue to dominate the topic because of the mismatch in the dynamics between revenues and expenditure,” Banda said.
Economics Association of Malawi President Bertha Chikadza said the gap between the budget’s projected inflation of 23.4 percent and the actual rate of 34.3 percent, along with GDP growth shortfall from the anticipated 3.2 percent to 2.3 percent, is a concern.
She said although the country had suffered a couple of problems, the mid-year review should see government seriousness to revamp the economy as such discrepancies raise questions about the credibility of economic policies and government execution.
“The mid-year review gives the government a chance to revise and refocus on how they can achieve the rest of the plans given the turnout of events at mid-year. The government should refocus on what is contributing to central government risks,” Chikadza said.
Treasury spokesperson Williams Banda said all the necessary information that Malawians needed to know would be shared when the minister will present to Parliament his mid-term budget statement.
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