Friday, July 19, 2024
BusinessBudget spikes by 17 percent

Budget spikes by 17 percent

The minister of finance and economic cooperation, Abrham Tekeste (PhD), tabled a budget bill which is 17 percent higher than last year’s before the House of Peoples’ Representatives on Thursday.

In addition to the 274 billion birr budget, it is to be recalled that the house approved a supplementary budget of 28.2 billion birr during the current fiscal year.

According to the latest budget bill, next fiscal year’s budget stands at 320.8 billion birr, with urban development and construction taking a big chunk (50.7 billion birr), followed by education (43.2 billion) and agriculture and rural development (12.2 billion). 

The amount proposed for public debt repayment is 16.9 billion birr, which is more than two-fold the budget set for sustainable development goals, which is seven billion birr.

The government has also allocated budget for industrial park development as well as revolving youth funds.

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According to the bill, the budget deficit will stand at 53.9 billion birr.

This deficit is said to be covered with internal sources. It was revealed that the amount of the deficit, which will be financed by domestic loans, would be 2.5 percent of the total gross domestic product (GDP). Next year’s budget deficit shows an almost 100 percent increase compared to what it was two years ago. Back in 2015/16, the proportion of the deficit which was covered by domestic loan was 27.6 billion birr.

“The budget deficit will not have a pressure on inflation,” according to Abrham.

Of the total budget, 114.7 billion birr will be allotted for capital expenditure, and 81.8 billion birr will be allotted for recurrent expenditure. In addition, around 117 billion birr will be used to subsidize regional governments. The subsidy for regional governments accounts 36.6 percent of the budget, showing a 16.9 percent increase compared to this fiscal year’s.

Of the total sum, some 221.1 billion, 17.1 billion, and 28.6 billion birr will respectively be sourced from domestic revenue, external assistance and loans and credit. 

The bill will be presented to the relevant standing committees for further consideration before being presented to parliament for approval.

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[speaker]
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