Finance Ministry Asserts Vitality of Budget Austerity

Jun 24 , 2023

The proposed 801 billion Br "conservative budget" was posed as a tool for fighting inflation by State Minister of Finance Eyob Tekalegn (PhD) last week. He addressed questions raised by members of the Plan, Budget and Finance Affairs Standing Committee chaired by Desalegn Wedajo. Eyob suggested that the reduction in the budget factoring inflation is a result of careful calibrations to create macroeconomic stability. With the goal of keeping the budget deficit at around 2.1pc of GDP, reliance on a "vibrant treasury market" was hinted at as an important fiscal tool in the Ministry's kit. Prioritisation of domestic and foreign debt repayment was also highlighted as an undercurrent in the devising of the proposed budget. As the federal government expects to source 60pc of its budget from taxes, Eyob suggested the expansion of services from which Value Added Tax (VAT) will be collected and the national implementation of property taxes as impending developments in the proposed budget. Eyob reiterated the notion of Ahmed Shide a month prior regarding the imminent restructuring of public servants with only targetted new employment slated for next year. "Our responsibility is to enable a bustling private sector," he noted.


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