The 2017/18 National Budget presented in Parliament yesterday has been formulated within the backdrop of a rebounding economy and an improving macroeconomic environment.
Total expenditure and net lending is estimated at K1 299.4 billion or about 26.2 percent of gross domestic product (GDP) comprising K946.6 billion or about 19.1 percent of GDP while recurrent expenditure is about K348.8 billion or 7.0 percent of GDP.
Presenting the budget in Parliament in Lilongwe yesterday, Finance Minister Goodall Gondwe said recurrent expenditure comprises K303.6 billion wages and salaries, K185.8 billion interest payments, K197.3 billion subsidies and transfers, and K256.0 billion purchases of goods and services.
He has planned domestically financed development expenditure at estimated K132.6 billion or 2.7 percent of GDP, which is 1.7 percentage points higher than 2016/17 financial year, while foreign financed development expenditure is projected to amount to K216.1 billion or 4.4 percent of GDP.
Total revenue and grants in the 2017/18 fiscal is at K1 108.0 billion which is equivalent to 22.3 percent of GDP. This comprises K980.3 billion or 19.7 percent of GDP domestic revenue and 2.6 percent grants.
“The momentum taxes displayed in 2016/17 is expected to continue into 2017/18 such that taxes are estimated to amount to K900.8 billion [18.4 percent of GDP]. This comprises K474.7 billion in taxes on income and profits, K364.2 billion in taxes on goods and services, and K78.8 billion in taxes on international trade.
“Non-tax revenue will total K79.4 billion [1.6 percent of GDP], K4.1 billion lower than the previous fiscal years on account of low remittances of dividends from Parastatals,” reads Gondwe’s summary of the budget.
The minister said the fiscal deficit has been reduced from 6.1 percent of GDP in 2013/14, when budget support and a sizeable share of dedicated grants were withdrawn, to 3.9 percent of GDP in the 2017/18 National Budget. n