The Ministry of Finance should have released a mid-year fiscal update by now, which it has not done so, says the former Governor of the Reserve Bank Savenaca Narube.
Narube said the Ministry of Finance should understand that basing medium-term projections on figures that were projected 10 months ago is very risky.
The former Permanent Secretary for Finance has requested the Minister for Finance Professor Biman Prasad to review the 2022-2023 budget to urgently provide an update to the people.
He said that there was a misplaced rationale in the fiscal strategy that the fiscal consolidation, which is basically a reduction in deficits, will slow economic growth.
“This is based on the false assumption by the previous Government that only government spending can support economic growth. This strategy should be corrected immediately by Government.”
“The impact of the government spending on the economy does not depend only on the quantum of spending, but more on the quality of spending. The solution is for the Government to introduce a package which implements measures to prop up growth, like economic diversification and removal of government intervention in the private sector, while it consolidated the fiscal position. This is a win-win combination,” Narube added.
He said that fiscal consolidation should be more on controlling and reprioritising spending.
“There is no mention in the fiscal strategy report of using universal techniques like Expenditure Reviews and Zero-Based budgeting to improve the quality of Government spending and reduce the deficit,” Narube said.