The Coalition Government has reported better-than-anticipated results for the 2023-2024 financial year, based on its provisional final fiscal performance record from the past year.
The report reveals an improvement from prior years, characterized by a lower-than-forecast budget deficit and reductions in debt. The government faced a deficit of $443.6 million, representing 3.4% of GDP, which is an improvement compared to the original budget estimate of 4.8%. This deficit was significantly lower than those recorded in 2022-2023 at 7.1% and in 2021-2022 at 12.1%, indicating effective management of government spending.
Total revenue reached $3,645.9 million, which is 27.7% of GDP, and was above expectations due to stronger collections from both tax and non-tax sources. This marked a substantial increase of 32.6% from the previous year. Tax revenue alone amounted to $3,096.8 million, exceeding the forecast by $60.9 million, which is a 2.0% increase over projections.
The growth in revenue was primarily driven by improvements in tourism and other economic sectors. Tax collection saw a 35.5% increase compared to the previous year, with significant rises in VAT, corporate tax, and departure tax. Non-tax revenue was reported at $549.2 million, surpassing expectations and encompassing income from dividends, grants, and the sale of government assets.
Shiri Gounder, Permanent Secretary of the Ministry of Finance, emphasized the government’s commitment to enhancing fiscal and debt sustainability in the report. Gounder stated that the fiscal consolidation path for FY2023-2024 has been solidified through effective revenue reforms and spending policies, coupled with a robust economic recovery supported by positive trends in vital sectors like tourism and increasing business confidence following the announcement of the FY2024-2025 National Budget.
At the end of July 2024, government debt totaled $10,309.2 million, equating to 78.3% of GDP. This reflects a decrease from previous years, down from 82.0% in 2022-2023 and 90.6% in 2021-2022, showing advancements in managing debt. The current debt composition consists of 63.9% domestic debt and 36.1% external debt.
Despite these positive developments, Gounder has warned of existing risks. He noted that while the growth momentum is expected to enhance with the initiation of key tourism projects and the rollout of government initiatives outlined in the budget, challenges such as adverse global developments, labor shortages, weather-related disruptions, and capacity constraints in some sectors could affect future projections.