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Malawi government overspends

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Reports released by the Reserve Bank of Malawi shows government is still spending beyond its means with expenditure for the third quarter of 2016 rising by K43.8 billion to K262.1 billion.

The total expenditures is against total revenues of K205.5 billion, creating an overall fiscal deficit of 1.5 percent of Gross Domestic Product (GDP) for 2016.

This is compared to a decrease of K23.4 billion to K218.3 billion recorded in the second quarter.

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In its Economic Review, RBM has indicated that the increase in expenditures during the quarter emanated from recurrent expenditures as development expenditures registered a decline.

The report says budgetary operations for the third quarter of 2016 registered a deficit of K56.6 billion following another deficit of K11.6 billion registered in the preceding quarter.

Total government revenues for the third quarter of 2016 decreased by K1.2 billion to K205.5 billion.

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Recurrent expenditures for instance increased by K44.0 billion to K217.6 billion, a turnaround from a decline of K43.3 billion registered during the second quarter.

Foreign revenue receipts dropped by K15.3 billion to K11.7 billion, a turnaround from an increase of K16.8 billion to K27.0 billion in the preceding quarter.

“The outturn was explained by a decrease in foreign receipts as domestic revenues registered an increase,” indicates the report.

Domestically mobilised revenues registered an increase of K14.1 billion to K193.7 billion.

Meanwhile, RBM says total public debt stock registered a marginal decrease of K10.2 billion to K1, 975.1 billion in the quarter under review.

Domestic debt stock contributed K757.2 billion, about 38.3 percent, while external debt contributed about K1,218.0, representing 61.7 percent to the total public debt stock.

“Consequently, the respective domestic debt to GDP ratio slightly increased to 19.4 percent from 19.2 percent while external debt to GDP ratio fell to 31.3 percent from 31.8 percent of the previous quarter,” indicates the report.

Domestic debt stock increased marginally to K757.2 billion from K746.7 billion recorded in the preceding quarter, representing about 1.4 percent increase in total stocks.

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