Government expenditure dropped in May, for the first time in 2020, by 23.8 percent at the back of a decline in both recurrent and development expenditure, Reserve Bank of Malawi (RBM) May Economic Review shows.
In the month, government spent K133.9 billion from K175.7 billion in the preceding month while K154.5 billion was spent in March, K151.3 billion in February and K125.2 billion in January.
Recurrent expenditures declined by 19.5 percent following a decline in expenditures towards generic goods and services, wages and salaries paid in the month, and interest expenses.
Development expenditures dropped by 44.8 percent to K16.6 billion due to decreased utilisation of project funds in the month.
On the other hand, revenue also declined by 30.3 percent to K78.6 billion where tax revenue mobilisation declined by 12.0 percent to K73.0 billion while non-tax revenues dropped by 39.3 percent to K3.1 billion and foreign receipts on the other hand declined by 89.7 percent to K2.6 billion.
“The outturn in the review month emanated from both domestic revenues and foreign receipts. Under domestic revenues, the impact of reduced economic activity due to coronavirus pandemic affected both tax and non-tax revenue collections,” reads the statement in part.
In its second quarter review, the Malawi Confederation of Chambers of Commerce and Industry warned that if the surging cases of Covid-19 are not contained on time, it may threaten to knock the economy harder.
“”The economy will therefore, continue to be under threat as long as Covid-19 cases are not contained,” reads the MCCI review in part.
The Covid-19 pandemic has hit different sectors especially hospitality, tourism and transportation.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.