Only a first step
■ DEPOSITS LIKELY TO RECOVER AFTER THE BUDGET WAS PASSED
■ THE GOVERNMENT FACES A CHALLENGING DEFICIT TARGET
■ DOLLAR PEG NEEDED FOR INVESTOR CONFIDENCE
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Parliament has passed the 2019 austerity budget. The approval of the budget is likely to boost investor confidence and trigger a recovery in bank deposits. The budget included a number of amendments, such as imposing a three percent customs duty on imports subject to valued added tax (VAT). International financial institutions have urged the government to implement the required reforms and execute cost saving measures in the budget. The International Monetary Fund (IMF) and the Institute of International Finance (IIF) expect the real deficit-to-GDP ratio for 2019 to be higher than the 7.6 percent target set by the government.
AUSTERITY BUDGET
The parliamentary Finance and Budget Committee had projected a total expenditure of nearly $16.9 billion and regular revenues of $12.8 billion for the 2019 budget. Prime Minister said: “Cutting the deficit in the, Regional Director at the World Bank. “For a successful outcome, we urge proper implementation of budget measures, as well as continued momentum into the budget of 2020,” he said. Parliament held the plenary session to ratify the budget behind closed doors. The session came after 31 meetings and deliberations by the Finance and Budget Committee. The Cabinet referred the draft budget to Parliament in the last week of May, more than seven months after the constitutional deadline.
