Treasury overshoots cash deficit, borrowings targets

The Treasury has overshot its cash deficit target and borrowings for the first five months of this year with capital expenditure, or public investments, being higher than expected, an encouraging sign given that the government used to sacrifice public investments to meet expanding recurrent expenditure.

The Mid-year Fiscal Position Report published by the Ministry of Finance and Planning shows a cash deficit of Rs. 95.3 billion, against a target of Rs. 90.2 billion, for the first five months of this year. The deficit of the previous year was Rs. 83.9 billion.

Inflow from revenue and other receipts was lower than the Rs. 359 billion target for this period, reaching Rs. 347.7 billion as against Rs. 295.6 billion the previous year.

Recurrent expenditure was below the Rs. 420 billion target, amounting to Rs. 408.3 billion. A year ago, cash outflow on recurrent expenditure amounted to Rs. 373.8 billion.

Cash outflow on capital expenditure amounted to Rs. 130.7 billion, overshooting a Rs. 119.7 billion target. A year ago capital expenditure outflow had amounted to Rs. 105.7 billion.

Gross borrowings amounted to Rs. 410.7 billion from a target of Rs. 396.8 billion for the first five months of this year. A year ago borrowings had amounted to Rs. 308.3 billion. Debt repayment was Rs. 231.3 billion, compared to Rs. 173.8 billion last year and a target of Rs. 177.2 billion this year.

The report discusses revenue and expenditure for period January to May but the budget deficit figures presented were for the period January to April. The deficit was 2.7 percent of GDP (Rs. 172.2 billion) as against 3 percent (Rs. 167.5 billion) a year earlier.

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