LILONGWE-(MaraviPost)-The mid-year budget review has been revised upwards from MK5.99 trillion to MK6.04 trillion.
The total grants review increased from MK4.55 trillion to MK4.63 trillion, resulting in a decrease in the estimated fiscal deficit from MK1.45 trillion, which represents 7.7% of GDP, to MK1.41 trillion, representing 7.5% of GDP.
The unforeseen expenditure budget line has also been adjusted to MK4.4 billion.
Minister of Finance Simplex Chithyola made these remarks during the mid-year budget review statement delivered in parliament.
He noted that the country’s economy has been severely impacted by climate shocks.
Chithyola stated that economic growth has been revised down from an estimated 4.0% in 2024 to 1.8%, down from the previous estimation of 2.3%.
Additionally, food inflation has surged to an average of 41.6%.
He highlighted that food inflation rose from 22.1% from January to October 2024 compared to 18.2% during the same period in 2023.
Chithyola announced that the government will remove the Value Added Tax (VAT) waiver on motor vehicle imports for certain privileged individuals and organizations.
Those affected by this measure include the State President, the Vice President, retired Presidents and Vice Presidents, Cabinet Ministers, Members of Parliament, senior officials in the Judiciary (including judges), senior Government officials, and senior military officials.
Furthermore, the provision for wages and salaries has been revised upwards by MK200 billion, increasing from MK1.08 trillion to MK1.28 trillion, which represents an 18.7% increase.
Chithyola emphasized that it is the government’s policy to promote economic stability and improve fiscal management.
In response, Democratic Progressive Party (DPP) spokesperson on Finance, Joseph Mwanamveka, criticized the removal of the VAT on motor vehicles for government officials and the President, arguing that it is unrealistic since many have already purchased their vehicles.
Mwanamveka also expressed concerns that the current government is unfairly penalizing small business operators (referred to as “Kabaza people”) by restricting their ability to conduct business, rather than implementing other measures to control road accidents.
The budget focuses on the theme of “Economic Recovery to Resilience,” aiming to accelerate production and enhance the legal and regulatory environment to protect the economy.
