The recent fiscal deficit has sparked debate about the nation’s fiscal prudence. With a deficit of 6.8% of GDP, experts argue that the government must revisit its borrowing strategy. The current borrowing limit is set at 5.5% of GDP, but the government has consistently exceeded this limit.
For instance, in 2022, the government borrowed 7.1% of GDP, exceeding the limit by 1.6%. This trend is expected to continue, with the government projecting a deficit of 7.3% of GDP in 2023. To mitigate this, the government should consider implementing austerity measures, such as reducing non-essential expenditures and increasing tax revenues. By doing so, the nation can ensure fiscal sustainability and maintain investor confidence.