Illustration of Budget report | Net deficit much lower than previous two years

Surprising Financial Turnaround: Coalition Government’s Deficit Drops Significantly

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The Coalition Government concluded the 2023-2024 financial year with a net deficit of $443.6 million, which is significantly lower than the budgeted deficit of $639.1 million announced in June 2023. According to the Ministry of Finance’s Fiscal Performance report for FY2023-2024, this deficit is also markedly reduced compared to the deficits of the previous two years.

Total government revenue for the fiscal year reached $3.6 billion, while total expenditures amounted to $4 billion. The report revealed that government debt reached $10.3 billion at the end of July 2024, a decrease in the debt-to-GDP ratio from 82.0 percent in July 2023 to 90.6 percent in July 2022.

Additionally, the fiscal performance surpassed revised revenue forecasts by $68.3 million or 1.9 percent, thanks to better-than-anticipated collections in both tax and non-tax revenue streams. Revenue collections increased by $896.1 million, representing a 32.6 percent rise compared to the previous financial year.

Specifically, tax revenues totaled $3 billion, exceeding the revised targets by $60.9 million or 2.0 percent, and showcasing an increase of $811.8 million or 35.5 percent from FY2022-2023. The ministry attributed these strong tax collections to changes in key taxes, including VAT, corporate taxes, departure tax, and customs duties, coupled with the robust performance of vital economic sectors like tourism and resource-based industries.

This positive financial performance suggests a strengthening economy and improved fiscal management by the government, marking a hopeful trend for future financial stability.

In summary, while the government recorded a deficit, the fact that this was lower than expected and previous years, coupled with strong revenue performance, indicates a resilient economic landscape moving forward.


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