The Coalition Government has exceeded expectations in its fiscal performance for the 2023-2024 financial year, as reported in its provisional final fiscal record. The report indicates an improvement over previous years, featuring a lower-than-anticipated budget deficit and a decrease in national debt.
The government recorded a budget deficit of $443.6 million, equivalent to 3.4% of GDP, significantly better than the original budget estimate of 4.8%. This also reflects a substantial reduction from the previous years’ deficits of 7.1% in 2022-2023 and 12.1% in 2021-2022, demonstrating an enhanced management of government expenses.
Total revenue for the year reached $3,645.9 million, making up 27.7% of GDP, due to stronger-than-expected tax and non-tax revenues. This marks a remarkable 32.6% increase compared to the previous year. Tax revenue alone was $3,096.8 million, exceeding forecasts by $60.9 million, or 2.0% above expectations. The rise in revenue was spurred by improvements in the tourism sector and other areas, with a 35.5% increase in tax collections compared to the previous year, affecting VAT, corporate tax, and departure tax. Non-tax revenue totaled $549.2 million, also surpassing projections, including income from dividends, grants, and the sale of government assets.
“Strengthening fiscal and debt sustainability remains a key priority of Government,” stated Shiri Gounder, Permanent Secretary of the Ministry of Finance. He noted that the fiscal consolidation path for 2023-2024 has been established through effective revenue reforms and expenditure policies, alongside a strong economic recovery. Gounder emphasized that the economy remains resilient, supported by positive trends in key sectors such as tourism and an increase in business confidence following the announcement of the 2024-2025 National Budget.
As of the end of July 2024, government debt stood at $10,309.2 million, or 78.3% of GDP, showing a reduction from 82.0% in 2022-2023 and 90.6% in 2021-2022. The debt composition includes 63.9% domestic debt and 36.1% external debt.
Nevertheless, Gounder warned that risks persist. He noted that growth momentum is projected to strengthen in the near term with the initiation of significant tourism-related projects and the execution of government initiatives outlined in the budget. However, he cautioned that adverse effects from global developments, a lack of skilled labor, weather-related disruptions, and capacity constraints in certain sectors could negatively impact the economic outlook.