The Treasury recorded a K19.1 billion surplus in April for the first time in the 2020/21 financial year after posting a K88.1 billion deficit in the preceding month, figures from the Reserve Bank of Malawi (RBM) show.
The surplus is equivalent to 0.2 percent of gross domestic product (GDP).
During the corresponding period last year, the government posted a deficit equivalent to 0.7 percent of GDP.
In its Monthly Economic Review, RBM says the April 2021 fiscal position was the first surplus, an improvement from the deficit that was equivalent to 0.9 percent of GDP in the previous month.
Economist from the University of Malawi Laston Manja rates this performance as a step in the right direction.
“Overall, having the level of total revenues over total expenditures is good news for the government, especially noting that the country has run monthly deficits over the past 12 months,” Manja said.
He, however, warned that the treasury remains at risk of operating in deficit as the operating environment remains volatile.
In a separate interview, economic commentator Cosmas Chigwe rated the April performance as positive.
“There was a 40 percent decline in expenditures during the said month, with some recurrent expenditure such as salaries also declining by around 35 percent. This is definitely a positive trend but only its sustainability will determine if we have reasons to clap hands,” Chigwe said.
The 2020/21 financial year was projected to end with a deficit of K810.7 billion, an equivalent of 8.8 percent of GDP, to be covered through foreign and domestic borrowing.
When presenting the 2021/22 National Budget, Minister of Finance Felix Mlusu indicated that the overall balance was estimated at a deficit of K718.3 billion, an equivalent of 7 percent of the rebased GDP.