Gov’t expects bumpy road ahead for the economy :: Mmegi Online

The budget deficit for the current fiscal year could rise by P700 million, while the growth estimate for the economy has been shaved marginally, as the combination of inflation relief measures and uncertain global conditions weigh on the local outlook, the latest Finance ministry estimates indicate.

From a brisk start to the fiscal year in which mining, particularly diamonds, helped produce an P838 million surplus in the first quarter, the war in Ukraine, rising inflation and interest rates as well as interventions such as the inflation relief measures announced in August, have introduced uncertainties into the country’s economic outlook.

The rebound in mining helped ease the 2021–22 budget deficit from an original forecast of P10.2 billion, to a shortfall of just P8.1 million, supported by a surge in diamond exports as well as underspending in the development budget.

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