Sharp decrease effects Budget

Source: Post-Courier, November 06, 2015, 12:55 am

ACCOUNTING firm KPMG International says the 2016 Budget has been set in the context of a challenging global and domestic environment.

KPMG managing partner Troy Stubbings, and partners and directors Praneel Nand, Scott Pearce, Wayne Schulz and Peter Zabaks have provided their analysis on the 2016 National Budget that was handed down by Treasurer Patrick Pruaitch and unanimously passed in Parliament on Tuesday.

In their analysis KPMG presented that sharp decreases in key commodity prices particularly oil and gas and drought conditions resulting in mine closures and reduced agricultural output have had a significant impact on Government revenues.

The Budget seeks to rebalance the debt portfolio to longer dated instruments with the cornerstone of the strategy being the issue of a K2.8 billion Sovereign Bond.

"With the oil price decreasing from $US90 bbl, as anticipated in the 2015 budget, to US$54 bbl now forecast for 2016 and the expectation that oil prices will remain depressed for the medium term there has been a need to rebase revenue assumptions and reduce forecast expenditure in order to limit the size of future deficits," they said.

"This context has driven the theme for the 2016 budget of "Supporting Economic Growth through Fiscal Discipline".