Government operations have recorded a budget deficit of K247.5 billion in first quarter that stretches between April and June.
This means the treasury is still burdened to borrow extra resources to fill the gap at a time public debt remains an issue even with development partners.
The K247 billion balance comes after expenditure totalled K822.1 billion while total revenues consisting tax, non-tax and grants amounted to K574.6 billion.
Reserve Bank’s July economic review highlights the existing revenue pressure that saw K51.5 billion deficit during the month.
“Central government revenues amounted to K203.9 billion in June 2023.
However, the collected revenues fell short of the required financing for K255.4 billion expenditures, such that a fiscal deficit of K51.5 billion was incurred during the period,” reads part of the report.
In the 2023-2024 fiscal year, the Malawi Revenue Authority – MRA is tasked to collect K2.13trillion tax revenue – about 25 percent higher than the previous year’s K1.5trillion.
MRA has managed to collect K453.9 billion between April and June which is slightly below the average quarterly target of K469.2 billion.
Economists have been critical on government persistent borrowing appetite which emanates from such revenue shortfalls on course of budget execution.
Meanwhile, International Monetary Fund – IMF is considering debt restructuring as one of the main parameters that hold Lilongwe’s key for the Extended Credit Facility.