April’s fiscal stimulus is likely not about to happen following a budget deficit of 12.6% of GDP. This figure is far
higher than what was predicted by the Chancellor Alistair Darling. Darling announced that an 8% GDP rise in borrowing was expected over next year. This amounts to 118 billion pounds. As a result, the April budget will have to be upgraded. Public finances are deteriorating rapidly and eating up on tax revenues and the surge in employment has also come about with a sharp increase in benefits payments. February experienced the biggest budget deficit on record that saw the public sector net borrowing amount to almost 9 billion pounds. This is 8 times higher than what it was a year ago. Credible forecasts will thus be needed in order to restore the health of public finances.

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Posted by Shue on May 2nd, 2009 :: Filed under Uncategorized
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