Government has conceded that the country`s budgetary deficit will continue rising despite growing concerns over the same.
According to Finance Minister Felix Mlusu, Malawi’s total public debt is currently at K4.1 trillion, the majority of which is domestic debt and the 2019/2020 financial year closed with a deficit of K555.6 billion.
“The deficit which our budget has created really is coming from the previous deficit which was already there, the deficit we found was K555 billion and we have pushed that to K754 billion,” expounded Mlusu.
Mlusu said much as government would like to clear the deficit, it is difficult because Treasury is under pressure to pay arrears on the projects that were carried out.
“It’s because of the various programmes that we have to do but also to deal with issues of arrears that we found in the government you know as government we are under pressure to make sure that we pay those arrears for our projects of which some of them have stalled,” he said.
One of the major fiscal challenges the country is currently facing is the high and rising public debt stock as domestic debt is currently rated at high risk of debt distress among most Malawians.
On Wednesday this week, Members of Parliament passed a K2.1 trillion national budget for 2020/2021 fiscal year.