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MEF: Government Borrows to Cover Budget Deficit in 2022

MEF: Government Borrows to Cover Budget Deficit in 2022

The Ministry of Economy and Finance was summoned to Parliament on Monday 6 November to be heard on the execution of the General State Account for 2022, and reported that in order to make up for the deficit in the 2022 budget, the government had to resort to internal loans and an additional effort was made to curb the growth of public debt.

According to the newspaper O País, the head of the finance portfolio, Max Tonela, was accompanied by his deputy, Carla Louveira, and other officials from the institution. It was on this occasion that the Ministry of Economy and Finance spoke of its efforts to curb the growth of public debt, even in situations of budget deficit, estimated at more than 14 billion meticais in the period in question.

“In order to finance this deficit, the government is receiving internal loans every year, mainly in the form of treasury bonds, as part of its strategy, set within the limit laid down by the budget law,” said the Deputy Minister of Economy and Finance, Carla Louveira.

Another way out seen by the executive is to consolidate reforms to reduce fiscal pressures from debt in the short and medium term. “We also have to emphasise that, in order to make this measure viable, reforms are being considered that aim to create efficient channels for non-bank creditors to participate in the market, with emphasis on other market participants, thus also introducing the segment of institutional investors,” she added, quoted by O País.

The General State Account for 2022 showed expenditure of more than 450 billion meticais and estimated revenue of more than 290 billion meticais, which corresponds to a realisation of 97 percent.

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